Buying an energy effi cient inverter air conditioner would be cheaper than a traditional one this year, given that the price gap between the two has come down to as low as Rs 3,000 from Rs 5,000 to Rs 6,000 last year. “With the scale moving up, manufacturing cost has come down. Early summer trends have shown a 20% growth compared to last year. People do not mind spending that little extra to purchase an inverter AC. This season we look at 50% contribution from the category, up from the usual 12-15%,” said Kamal Nandi, business head and EVP, Godrej Appliances. Besides, it was mandated in January for AC brands in the country to shift from Energy Efficiency Ratio (EER) to Indian Seasonal Energy Efficiency Ratio (ISEER), which will help bring down energy consumption of ACs to as low as 40%. The regulation change gives scores to the air conditioners basis their energy efficiency downgrading the previous ratings by 2 steps. So for the same rating, the energy efficiency improves, thus favouring growth of inverter models.

Blue Star, which launched inverter variants this summer, sees a drop from 15%- 10% in the price gap between the inverter and fi xed speed models on an average. “Post the ISEER changes, there is almost no price diff erence between a 5 star fi xed speed and inverter model. To avoid recurring costs, consumers are shifting to inverter ACs. With inverters contributing to 40% of the total AC sale this year, we expect the growth to be 65% by 2020,”said B. Thiagarajan, joint managing director, Blue Star. Air conditioner makers are bullish about a double digit growth with inverter ACs driving the growth. Korean consumer durables company LG, which moved to a 100% inverter-based inventory
last year, said that the market share of inverter ACs in the industry grew from 12% to 31%. “Further to our aggressive push, the reduction in price gap will also drive sale. Last year, the price gap between the two variants in the industry was Rs 7,000 and now it has come down to Rs 4,000 and until March this year, we see a growth of 50% compared to last year,” said Vijay Babu, business head-RAC, LG Electronics India.

(Source: ET Retail.com, March 30, 2018)