Industry News

Micromax forays into Air Conditioners Market

India: Tech firm Micromax is now foraying into the air-conditioner category. Micromax announced its entry into the air conditioner (AC) market. The company's new range of ACs comprises three split type models and one window unit which would be available in capacities of 1.5 and 2 Tonnes. The company would manufacture its air conditioners at its facility in Uttarakhand. These air conditioners would be priced between INR20,000 to INR30,000. The company has plans to invest INR2 billion in the category over the next year.

The company has strong positioning in the Indian Consumer Durables market.  The company started selling televisions in 2014 and currently gets about 12% of its overall revenue from this segment. The company has also been planning to manufacture refrigerators and washing machines. The company expects to generate 15% of its revenues to come from LED TVs and 5% from air conditioners by December 2017. The company closed FY16 with revenues close to $2 billion (roughly INR13,350 crores). It expects to clock an overall growth of about 30 percent this year.

According to TechSci Research, the Micromax’s entry into consumer durables sector is likely to increase the completion in the market. The air conditioning products to be launched by the company would have technologies such as auto restart, low noise, self-diagnosis, filter clean indicator, silver Ion filter, vitamin c filter and high energy efficiency. The company has also placed these products under a low price range which would attract budget buyers.

According to a recent report published by TechSci Research, “India Air Conditioners Market Forecast & Opportunities, 2020”, the Indian air conditioners market is projected to grow at a CAGR of over 10% during 2015-20. Accounting for a lion’s share of the air conditioners market, split air conditioners segment was the highest revenue generator, followed by VRFs and window air conditioners in 2014. The market share of window air conditioners has been declining over the last few years on account of decreasing price gap compared to split ACs, due to which many leading companies such as Samsung and LG have exited from the windows air conditioning segment while other major companies like Voltas, Daikin, Blue Star, etc., have lowered the production of window air conditioners in the country. Northern India generates the highest revenue in the country’s air conditioners market, followed by Southern and Western regions.