India Air Conditioner market shall reach US$ 399.88 Billion by 2028, driven by rising temperatures, urbanization, and a growing middle class with higher disposable income
05 Jun, 2023

Renub Research has recently released a report named "India Air Conditioner Market, Size, Forecast 2023-2028, Industry Trends, Growth, Impact of Inflation, Opportunity Company Analysis" providing a detailed industry analysis that consists of market share insights. Furthermore, the report encompasses a study of competitors and regions and the recent growth in the Indian air conditioner market. India Air Conditioner Market will expand at a CAGR of 7.76% by 2023-2028. Summer in India has long been synonymous with scorching heat, but in recent times, it has reached unprecedented levels, pushing the limits of human endurance. Rising temperatures have become a formidable challenge across the country, impacting various regions of the world's most populous nation.

As global warming increases, air conditioners are necessary in hot and humid regions. The demand for India air conditioners has also increased due to the growing urban population, which experiences higher temperatures due to the urban heat island effect. The rise of Indian middle class has increased the affordability of air conditioners, making them accessible to more people. New technologies have also produced energy-efficient models, reduced their environmental impact, and made them cost-effective for consumers. Air conditioners can also improve indoor air quality by filtering out pollutants and allergens, providing significant benefits for those with respiratory issues.

As urbanization in India continues to grow, the demand for air conditioners has increased, especially in cities with hotter climates due to the urban heat island effect. In a bid to bolster domestic manufacturing and reduce dependence on imports, the Indian government has introduced the Production Linked Incentive (PLI) scheme, spanning from the fiscal year 2022 to the fiscal year 2029. This ambitious initiative comes with a substantial budgetary allocation of Rs 6,238 crore. The primary objective of the scheme is to curtail the reliance on imported components, which currently constitute up to 50% of the total cost of an air conditioner.

The government's focus on infrastructure development has increased air-conditioned buildings such as malls, hotels, and offices. Improved indoor air quality through air filtration is also a significant benefit of air conditioning, especially in a region where air pollution is a significant problem. The demand for intelligent air conditioning systems, which people can control through smartphones or other devices, is also increasing as customers become more aware of their energy efficiency and cost savings advantages. This trend shall continue in the future.

Report Details:

Affordability and ease of installation of room air conditioners have led to their hegemony in the Indian air conditioner market

India room air conditioners are popular due to their affordability, ease of installation, and portability, contributing to their market dominance. Unlike central air conditioning, they are easy to install and do not require significant building modifications, making them a suitable option for homes and apartments. They consume less power than central air conditioning, making them more practical in areas with an unstable power supply. Furthermore, given India's hot and humid climate, room air conditioners are more suited to provide localized cooling and maintain comfortable temperatures. They are readily available with several options, making them a convenient choice for consumers.

Type

1.    Room Air Conditioner
2.    Ducted Air Conditioner
3.    Ductless Air Conditioner
4.    Centralized Air Conditioner

Split air conditioner holds the dominant position in the Indian air conditioner market

Split air conditioners have gained significant popularity among Indian consumers owing to their energy efficiency, sleek design, and efficient air distribution system. They can be positioned in different room parts, enabling customized temperature settings and improved cooling control. To providing better air quality, split air conditioners are highly reliable and require minimal maintenance. As competition and demand have increased, they have become more reasonable, making them accessible to a broader range of consumers in India.

Product Type

1.    Windows AC
2.    Split AC
3.    Other AC

Increasing demand for 2-ton ACs in the Indian air conditioner market can be due to their energy efficiency

The demand for air conditioners with higher cooling capacity is rising due to the increasing size of residential and commercial spaces. 2-ton ACs are famous for their ability to cool larger areas effectively. The growing disposable income among middle-class households in India has raised the demand for advanced air conditioning systems, with 2-ton ACs considered premium products with superior performance. Energy efficiency is also a significant factor in the growth of 2-ton ACs, as technological advancements have produced more efficient models. Financing options and payment plans have made purchasing 2-ton ACs more popular, despite their relatively higher cost than smaller units.

Size

•    1 Ton
•    1.5 Ton
•    2 Ton
•    More Than 2 Ton

Growth in the demand for air conditioners in commercial and retail appliances is fuelled by advancements in eco-friendly methods

Businesses are investing in air conditioning systems to generate a comfortable environment for employees and customers, boosting productivity and sales in the competitive market. Advancements in energy-efficient and eco-friendly technologies have made the cost of installation and operation more justifiable for businesses. The need for public spaces to provide a comfortable environment to cater to changing lifestyles has further contributed to the growth of air conditioning systems in commercial and retail applications. Customers prefer businesses that offer a relaxed atmosphere, and government regulations mandating comfortable working environments have increased air conditioning system adoption.

Application

1.    Residential
2.    Commercial & Retail Application
3.    Hospitality
4.    Transportation & Infrastructure
5.    Healthcare 
6.    Others Applications

Small and medium-sized retailers predominantly dominate the Indian air conditioner market due to their local accessibility

Numerous small and medium-sized retailers in India have made air conditioners available in local areas. These retailers offer personalized shopping experiences and have a better understanding of local markets and customer preferences. Their lower overhead costs allow them to provide competitive pricing, which appeals to cost-conscious consumers. Small retailers offer financing options or instalment plans to facilitate air conditioner purchases. With strong relationships with local distributors and manufacturers, they can offer a broader range of products and better after-sales service.

Sales Channels

1.    Small Retailers
2.    Modern Retail/ MBO
3.    Online

In the upcoming years, North India will dominate the India Air Conditioner Market

North Indian states, including Delhi, Haryana, Uttar Pradesh, Punjab, Rajasthan, and others, dominate the Indian air conditioner market due to consistently high temperatures and widespread AC usage. The demand for air conditioners is expected to grow further as these regions continue to experience above-average temperatures. The hot and humid climate, coupled with urbanization and a growing middle class with higher disposable income, has made air conditioning a necessity in North India. This has led to a high level of AC penetration in residential, commercial, and industrial sectors. Manufacturers are likely to focus on these regions, introducing innovative and energy-efficient cooling solutions to meet the increasing demand and expand their market share.

Region

1.    North
2.    South
3.    West
4.    East

Competitive Landscape

Some of the major competitors in the Indian Air Conditioner Market include Voltas Limited, Blue Star Limited, Havells India, Whirlpool India Ltd., Godrej & Boyce Manufacturing Company Ltd., MIRC Electronics Ltd., and Johnson Controls-Hitachi Air Conditioning India Ltd.

All the companies have been surveyed from 3 viewpoints.

•    Overview
•    Recent Developments
•    Sales Analysis

Company Analysis

1.    Voltas Industries
2.    Blue Star Industries
3.    Havells India Limited
4.    Whirlpool of India Limited
5.    Godrej and Boyce Manufacturing Company Limited
6.    MIRC Electronics Limited 
7.    Johnson Controls-Hitachi Air Conditioning India Limited