AC Sales Growth Cools Despite Heatwaves

Heatwaves Spike but AC Sales Growth Cools

Heatwaves are sweeping across northern and eastern India. Yet, the room air-conditioner (RAC) industry is not as hot. They are heading into the second half of 2025 with low expectations.

Sales Spike in June

June saw a spike in sales due to the heat. But patchy weather and unexpected rains in many areas have led major AC makers to cut their growth forecast. They now expect just 10–15% growth for the year.

Disappointing Summer

This summer has left AC makers underwhelmed. Early optimism in February and March led companies to build up inventory. They forecasted robust growth, some aiming as high as 25 to 30 percent year-on-year. But unseasonal rainfall and fluctuating temperatures quickly dampened that outlook.

Industry Leaders Speak

Blue Star managing director B Thiagarajan said, “We all had planned for a 25 to 30 percent growth, which is not going to take place. This is a disappointing summer; that is the truth. It is part and parcel of the game. We have to manage the situation and move forward.”

Thiagarajan noted that while the June quarter may end up being weak, there’s hope for a recovery. The festive season and later in the year when energy rating norms change could help. This typically prompts pre-buying due to discounts on older models.

Weather Affects Demand

The India Meteorological Department (IMD) forecasted a drop in temperatures mid-June. Cooler winds and thunderstorms from a western disturbance are expected. This further affects AC demand.

Voltas MD & CEO Pradeep Bakshi echoed these concerns. He revealed that the industry has seen minimal to negative growth in the last two months. “Rather, there has been a de-growth for the industry. Hitting last year’s numbers would itself be a challenge,” he said.

Late Relief Possible

After losing April and May, it’s difficult to recover in the remaining 10 months. However, Bakshi noted that a recent spike in temperatures, particularly in the north, could bring some late relief.

“Achieving last year’s target and overshooting it by 25 percent looks a bit of a challenge,” he added.

Mixed Picture

Haier Appliances India President N S Satish painted a similarly mixed picture. Year-to-date growth in RAC sales stood at 30 percent, he said. But April and May saw a decline of 10–15 percent. June, however, showed signs of revival thanks to a heatwave-led rise in impulse buying.

“If I compare June last year versus this year’s June sell-out, it’s almost now 20 percent plus to the consumer,” Satish noted. “Last year was an unprecedented summer. On that, if the industry is still growing, it is a tremendous performance.”

Overall Growth Estimate

Satish estimated overall annual growth to settle at around 10–15 percent.

India’s RAC Market

India’s room air-conditioner market is among the fastest-growing in the world. Over 12 to 15 companies compete in a space estimated at around 15 million units.

Key Points

• Heatwaves sweep across northern and eastern India.
• AC sales growth forecast cut to 10–15% for the year.
• Early optimism dampened by unseasonal rainfall and fluctuating temperatures.
• Industry leaders express disappointment but hope for recovery.
• India’s RAC market remains one of the fastest-growing globally.