Due to the loss beheld in the June quarter and the worst hit was the air conditioner segment, Godrej Appliances on Thursday said the consumer durables industry is likely to contract 12-15 per cent in 2020-21.

Corresponding to the earlier year mainly due to the loss observed in the June quarter and the worst hit was the air conditioner segment.

Interviewing reporters at a virtual press conference, Godrej Appliances Business Head and Executive Vice President Kamal Nandi said the company too encountered challenges because of the unusual rise in commodity prices all across, which ended in a huge rise in input costs in air conditioners and refrigerators.

Kamal Nandi spoke, “Roughly at an industry level we're expecting about 12-15 per cent de-growth at an overall level. And the worst hit has been the air conditioner segment, which is expected to de-grow somewhere around 30-35 per cent. And the reason behind this is the loss in the first quarter, which contributes about 35-40 per cent to the overall revenue.”

Nandi said high Customs duty was also committed to the rise in the input costs of printed circuit boards (PCBs), principally used in compressors in air conditioners and refrigerators.

Though, he stated, the future is bright with huge potential as the air conditioner category is growing following higher disposable income and rising summer temperature.

“Given that we are all working from home and this trend is expected to continue for some time, and therefore, to ensure a very comfortable and productive atmosphere at home and for kids attending online classes there is a need to have air conditioners at home.”

I think that will also fuel the market very fast. Also, we are observing a new trend that is coming up. Given that there is an increase in awareness about health. I think consumers are now looking for more numerous appliances which are healthy for them and their families,” Nandi said.

The reporters asked whether Maharashtra lockdown will harm sales, Nandi said, the state offers about 10-12 per cent and another 3-4 per comes from Madhya Pradesh, however, the rest 85 per cent of the market is open and the company is eyeing higher traction for sure.

The company declared the launch of its range of 100 per cent 'Made in India' eco-friendly air conditioners with the added support of health.

Driving its commitment towards 'Make in India', the brand has set up a new AC manufacturing unit at its Shirwal factory in Maharashtra.

Over the last seven years, the brand has invested Rs 1,100 crore in capacity, R&D and technology expansion.

“The brand has invested Rs 50 crore in the capital, sanctioned machinery, tools infrastructure and backward union for the air conditioner category, including AC heat exchanger coils and Indoor Units.

“This will add 4 lakh units of AC production capacity at Shirwal in 2021. Another 4 lakh units of AC production capacity will be added in Mohali by 2025 with an additional similar investment, taking the total investment to Rs 100 crore,” the company said in a statement.

Godrej Appliances is also aiming at 10-12 per cent sales in the coming year from e-commerce channels, which is 5 per cent currently, Nandi said.

“E-commerce channel is approximately 5 per cent. But as we improve in terms of development of an exclusive portfolio for the e-commerce channel, we are targeting approximately 10-12 per cent share of buyers from the e-commerce business in the coming year,” he added.