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AC Makers Coolly Migrate South for Better Business
4 Oct
Summary
- AC manufacturers are relocating production from North to South India.
- New factories in Sri City and Tamil Nadu boost capacity significantly.
- Southern regions offer longer cooling seasons and lower logistics costs.
Air-conditioner manufacturers are undertaking a significant production shift from North to South India, establishing new facilities in Sri City, Andhra Pradesh, and Tamil Nadu. This migration, spurred by the central government's production-linked incentive scheme and the strategic advantage of proximity to growing southern markets, is set to dramatically increase manufacturing capacity.
Companies like Daikin, Blue Star, LG, Carrier, Havells Lloyd, Voltas, and Mitsubishi Electric have opened or expanded plants in the region. This corridor is becoming a major AC manufacturing hub, with projections indicating that by 2027, a substantial portion of India's AC production could originate from Sri City and its surroundings.
The move south offers compelling economic benefits, including estimated savings of ₹1,200 per AC due to reduced logistics and proximity to Chennai port for imported components. Furthermore, the longer cooling season in South India, with minimal winter, presents a consistent and extended demand for air conditioning units, reinforcing the strategic decision to relocate.
