Voltas looks to hike AC prices by 5-15% this year owing to cost pressures

New Delhi (PTI): Voltas is expecting air conditioner prices to go up by 5-15 per cent this year owing to increase in copper prices and the rupee weakening against the dollar, Managing Director Mukundan Menon said on Tuesday.

The country's leading air-conditioning manufacturer, having a market share of around 18 per cent in the domestic market, expects domestic AC sales to grow by 15-20 per cent in 2026 over last year which turned out to be exceptionally bad for the entire industry.

In an interaction with PTI, Menon stated that efforts to make AC units more efficient due to energy label change this year has also played a role in the increase in the production cost.

"As there is a requirement for more copper, aluminium and steel, it leads to a 5-15 per cent increase in the production cost per unit," he noted.

Besides, copper price, which hovered around USD 8,500 per tonne last year, has gone up to USD 12,000-13,000 per tonne this year, Menon stated.

So there is a significant amount of copper which goes into the air conditioner and because of that, there is an impact on the overall production cost, he added.

Besides, some of the AC parts are still imported and there is an impact due to the weakening of the rupee against the dollar, he said.

Menon noted that in order to curtail the impact, the company is looking to hike AC prices by 5-15 per cent.

On market conditions, he noted that the industry expects AC sales to increase by 15-20 per cent as compared with last year.

He said the company is geared up to meet the enhanced demand with a production capacity of 30 lakh split AC units evenly spread across two plants in Uttarakhand and Tamil Nadu.

"We are also looking to enhance localisation level in AC units from 70 to 90 per cent in the next two years by expanding local sourcing for compressors, motors, PCBs, copper and aluminum components," Menon said.

The company has already seen the localisation grow to current levels from 35-40 per cent a few years ago, he added.

Menon said the company would like to maintain leadership in the AC segment on the back of new products and enhanced sales and service support.

He said that the domestic AC industry players are also working with the government to work out ways to enhance exports from India.

Currently, China overwhelmingly leads the segment with Thailand coming in at a distant second position.