Split is cool in AC mart

Split air-conditioners (ACs) are grabbing increasingly larger pie of the AC market in India at the cost of window air-conditioners. They currently comprise 30 per cent of the one million unit room ACs market in the country.

In calendar year 2003, split ACs recorded a growth of 29.5 per cent, while the total room air-conditioner market grew at a much slower 15.3 per cent, according to retail audit firm ORG-GFK.

Over the last four years, the split ACs segment grew by approximately 25.5 per cent, while the total room AC market grew approximately by 16.52 per cent. With the early onset of summer this year, companies expect that the overall market will grow by 20 per cent.

The local leader in split ACs is Korean chaebol LG. It is trailed by Voltas, Carrier and Hitachi, among others, not necessarily in that order.

Says Amit Doshi, vice president, operations & marketing, Hitachi Home & Life Solutions, "The Indian AC market is going through an evolution on the lines of the automobile market. First-generation ACs are making way for second and third generation ACs. Just like small cars are making way for mid-sized cars."

Salil Kapoor, country head, air-conditioner division, sales & marketing, LG Electronics India, believes given the pace of growth of split ACs, their share of the total market will go up to 50 per cent in the next five years.

Even a couple of years back, the split ACs were considered a luxury product. The growth in this segment, according to market experts, has been triggered by falling price-tags, aesthetic appeal, rising consumer aspirations, technology and innovation, lifestyle needs, increased purchasing power and power efficiency.

"The price difference between split ACs and window ACs has narrowed significantly over the last four years," says Kanwaljeet Jawa, vice president""cooling appliances of Voltas.