In the wake of the economic slowdown, AC manufacturers are relying on resilient segments such as government-funded infrastructure projects, hospitality and healthcare to prop up the declining institutional sales.

The increasing sales of Split and window ACs this summer have come as a relief to manufacturers who were sweating it out in the B2B segment. The AC-equipment market is estimated at around $1 billion in 2008, growing at a CAGR of 20%. The institutional segment including commercial ACs used in retail stores, airports and corporate buildings accounts for an estimated 15-20% of this.

With a hope that residential demand stays robust, as always during the peak summer April-June quarter, they would be able to steer the business forward. According to industry players, the residential AC sales have been growing at an average of 15% since March 2009.

Krishan Sachdev the Carrier air-conditioning & refrigeration’s director-marketing and strategy said “The institutional segment registered single-digit growth rate or even negative growth rates in the second half of FY09, which is likely to continue into this fiscal. We are, however, depending on government-funded infrastructure activities which are on track, such as airports, and the rapidly-expanding healthcare sector. The hospitality sector, which is expanding in non-metros and the NCR region over the Commonwealth games this fiscal, will also be a focus area.”

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Posted by Amrith K.A on 1 May, 2009 5:25:48 PM IST #