AC prices may rise; Blue Star says may witness supply chain disruption in mid April due to virus outbreak in China

Air-conditioner components can fall short in supply due to the outbreak of novel coronavirus in china.

"There may be an increase of about Rs 200 per air conditioner due to the budget announcement hiking customs duty for components such as compressors and motors." a top official said. Photo:Pixabay

AC sales: Air-conditioner maker Blue Star was closely monitoring the situation in coronavirus-hit China as the company expects disruption in supply chain for components in mid April, a top official said on Tuesday.

"Every industry player is somewhere or the other connected to China for supply of equipment. Particularly electronic component from China.

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The good news is we will not have problem. But, there could be supply chain disruption in mid April. We are monitoring..", Blue Star Ltd Managing Director, B Thiagarajan told reporters here.

He said this after unveiling a new range of air- conditioners under 'D', 'Q' and 'Y' brand priced from Rs 31,990.

China reported the outbreak of novel coronavirus on December 31, 2019.On Monday, Chinese officials said the toll has climbed to 2,592, while the total number of confirmed cases increased to over 77,000.

To a query on the impact of novel virus, he said, "for the first time we are discovering that somewhere or the other they (component manufacturers) are connected (with China).

The movement of containers (from China) is slower than what we anticipated."

He said, "in terms of shortage of components, some dealers want to stock ahead and therefore there may be shortage.."On the segments likely to be impacted, he said, "it will be room air-conditioners followed by deep freezer (segment)."

Asked whether there may be an increase in prices, he said, "There may be an increase of about Rs 200 per air conditioner due to the budget announcement hiking customs duty for components such as compressors and motors."

"We are lifting some components by air instead of ship in order to keep the supplies. All put together there is an impact of 3 per cent on some models, 5 per cent on few others. Price increase has been announced," he said.

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