PL Sector Update - Consumer Durables - Room Air Conditioner (RAC) Channel Check update (June-2023)
Prabhudas Lilladher Pvt Ltd
Consumer Durables - Praveen Sahay - Research Analyst, Prabhudas Lilladher Pvt Ltd
Room Air Conditioner (RAC) Channel Check update (June-2023)
We connected with 13 dealers of RAC across India to gauge the summer season’s demand/pricing scenario. As per our interaction, demand for Room Air Conditioners were moderate and North India stands most affected due to unseasonal rains. Below key takeaways:-
Competitive Price to continue
Due to intense competition, brands have not yet taken any price hike.
Soft Demand in summer season
Volumes picked up by April end, however May-June were again impacted due to unseasonal rains (mostly in North India). West India saw pick up in May-23 with severe summer, while dealers were still at lower sales volume compared to previous year’s summer season. Demand may further stand impacted with the upcoming rainy season.
RAC Inventory at normal level
Our channel checks suggest that inventory is at normal level, an average of around 45 days at dealer’s level.
Other highlights
The most selling product in RAC segment is 1.5 ton 3-star AC’s of Voltas and Daikin. In the high end range, Mitsubishi and O-General AC’s are preferred.
Exhibit 1: Channel Check details
| Location | Demand | Price | Inventory | |
| North India | ||||
| Dealer 1 | Saharanpur, UP | Low (vs last season) in April-May | No Price hike | 40-50 days |
| Dealer 2 | West Delhi | Low (vs last season) in April-May | around 50 days | |
| Dealer 3 | Chittorgarh, Rajasthan | Normal demand | No Price hike | |
| Dealer 4 | Gurugram, Haryana | Low (vs last season) in April-May | No Price hike | 45-55days |
| South India | ||||
| Dealer 1 | Bangalore, KA | Normal demand | No Price hike | 40-45 days |
| Dealer 2 | Karimnagar, Telangana | Normal demand | No Price hike | |
| West India | ||||
| Dealer 1 | Ahmedabad, MH | Low (vs last season) in April-May | No Price hike | 50-55days |
| Dealer 2 | Nagpur, MH | Low (vs last season) in April-May | Pricing same since Jan | Medium inventory at 45 days |
| Dealer 3 | Aurangabad, MH | Low (vs last season), pick up in May while low in June | No Price hike | |
| Dealer 4 | Mumbai, MH | Low (vs last season) in April-May | No Price hike | |
| Dealer 5 | Nagpur, MH | Low (vs last season) in April-May | No Price hike | 50-55 days |
| Dealer 6 | Mumbai, MH | Low (vs last season) in April-May, pickup in April end | No Price hike | 35-40 days |
| Dealer 7 | Mumbai, MH | Low (vs last season) in April-May | No Price hike | |
Source: PL
Exhibit 2: Channel Check Summar
| Date | Dealers Connected | Brands - dealer | Category | Price | Promotion & discounts | Inventory | Demand | |||||
| Feb'23 | 8 | Bluestar & Daikin | RAC | | - | 40-50 days | Expected to increase in Mar'23 | |||||
| Mar'23 | 30 | Voltas & Lloyd | RAC | | around 15% | 35 days | Expected to increase by end of month | |||||
| April'23 | 20 | Voltas & Bluestar | RAC | | - | 25-35 days | Increased in April | |||||
| June'23 | 13 | Voltas, Bluestar & Llyod | RAC | | - | 45 days | Low - Affected due to unseasonal rains |