CHENNAI: The prices of air-conditioners are to set to go up soon. The price rise will be in the region of 6-8 per cent, according to T. G. S. Babu, President of the Refrigeration and Air-conditioning Manufacturers' Association (RAMA).

Though reluctant, the members of RAMA are compelled to raise prices on account of escalating prices of inputs such as steel, copper and aluminium in the past one year. The price of 1.5-tonne window AC would go up by around Rs. 1,000 and that of split AC by Rs. 1,500, Mr. Babu said. The price hike would come into force by the end of this month, he added. The price of central AC, too, would go up. A central AC system cost around Rs. 25,000-35,000 a tonne, depending on the kind of job involved.

Mr. Babu said the industry had not raised the prices in the last three years. In fact, the prices of AC equipment had been coming down owing to a combination of factors like excess capacity and imports from China. Even when steel prices had begun to rise in 2005, the industry did not increase prices, he pointed out. With a 25 per cent growth, the industry was able to absorb the cost increase thanks to the sales volume.

"We have kept the prices the same even this summer,'' he said. The industry did this despite the fact that the prices of copper and aluminium had risen substantially in the past one-year. From $3,435 a tonne in April 2005, copper prices had shot up to around $7,800 now on the London Metals Exchange (LME). Similarly, aluminium prices, too, had gone up to $2,800 a tonne from $1,860 in April 2005.

"We are unable to hold prices in the wake of cost-push pressures,'' Mr. Babu said.

To a question, he said the price rise would have little impact on the demand. The room AC segment was growing at 20 per cent and the central AC segment at over 30 per cent. Mr. Babu said the demand for central AC was due to the boom in IT and financial services fields.

To another question, Mr. Babu said the Chinese, too, had communicated an impending price rise of around 10 per cent on their products. In 2005-06, a total of 1.5 million room ACs were sold in India. A third of it came from China, he said.

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