Air conditioners (ACs) were once thought of as luxury items that are only enjoyed by the elite, but their prices have seen a drastic fall in the recent years thanks to increased local production and assembly.

Jhimi Chakma, a lecturer of the philosophy department at Dighinala Degree College in Khagrachhari, has been using a locally made 1.5-tonne inverter AC for the past one year without any disruption.

According to him, it would cost at least Tk 90,000 for an international brand unit while he spent only Tk 65,000 for practically the same service.

Like Chakma, Iqbal Hossen, an official of the Central Procurement Technical Unit, said he has also been using a 1.5-tonne non-inverter unit of a local brand for around two years.

Hossen said he is very pleased with the air conditioner that cost him only Tk 55,000, as he has also been provided with great aftersales services by the local company.

The demand for affordable home cooling systems is growing fast, said Ruhul Alam Al Mahbub, chairman of Fair Group.

"To meet the rising local demand, Fair Electronics yesterday launched a new manufacturing facility for Samsung air conditioners in Shibpur upazila of Narsingdi district."

The factory will not only create employment opportunities, but also bring foreign currencies to the country through exports, Mahbub added.

"The local production of Samsung's products will help in gaining confidence of the foreign investors, especially the hi-tech companies," Zunaid Ahmed Palak, state minister for ICT, said while inaugurating the new unit.

"This would enhance our employment opportunities. So we ensure our continued support for Samsung, Fair Electronics and all other hi-tech industries."

Palak said he hopes the factory will start contributing to the country's exports in the near future.

Currently, Walton, MyOne, Unitech, Transcom Digital, Vision, Jamuna and Butterfly either locally manufacture or assemble air conditioners.

However, the value addition in assembly is not significant compared to local production.

The manufacturers and assemblers import around 70 per cent of the parts needed to make an AC, including the compressor and other technical components, industry insiders say.

Local production caters to around 70 per cent of the country's total demand, which was valued at about Tk 4,500 crore in 2019, up from Tk 3,500 crore the year before.

The demand for ACs has increased at an average of over 15 per cent annually since 2014, which encouraged global brands to set up their own plants in Bangladesh, they added.

Saikat Azad, deputy general manager for marketing at Transcom Digital, said the consumers were definitely the beneficiaries of such developments as they can now purchase reliable products at competitive prices.

International brands are investing in their own manufacturing or assembly plants in the country through partnerships with local companies, who are also getting benefitted from the shared technology.

This helps the local manufacturers and assemblers build up their capacity to ensure quality products at competitive prices, Azad said.

The deputy general manager of Transcom Digital went on to say that his company would soon begin assembling the air conditioners of Japanese brand Daikin under its base brand in Bangladesh, Whirlpool.

The company is taking the step at a time when the government is discouraging imports of consumer electronics in order to encourage local production, he added.

Tanvir Rahman, CEO of Walton Air Conditioner, said the price of air conditioners has become more reasonable thanks to local production.

"For this reason, the growing middle-class now prefers using ACs of local brands," he said.

Just 10 years ago, the market was completely dominated by multinational companies like General, Hitachi, Panasonic, Samsung and LG, according to the CEO.

Back then, ACs were considered as luxury products to be only used by the affluent people.

If local companies did not take risk of investing in manufacturing, the price would still be high, Rahman added.

Global brands emphasise on non-inverter technology to keep the prices low instead of introducing modern technology in Bangladesh while local companies give more focus on inverter technology since it consumes less electricity, he said.

Around 4.2 lakh units of air conditioners were sold in 2019 while the demand came down to 1.20 lakh in 2020 due to the Covid-19 fallout.

The demand for ACs is also increasing in rural areas thanks to the availability of electricity and spiralling purchasing power of the middle-class, he added.

The increasing number of manufacturing facilities in the country has made the local consumer electronics and home appliances market more competitive, Raziur Rahman, senior manager for marketing communication at Singer Bangladesh, told The Daily Star.

"When a market becomes competitive, consumers become the ultimate gainers in terms of value for their money."

The manufacturing facilities of Singer, a leading consumer electronics and home appliance manufacturer and marketer, have given the brand leverage in customising products as per the needs, trends, taste and affordability of different segments of consumers in the country, he said.

Currently, Singer is manufacturing refrigerators, LED TVs and air conditioners at their plants.

"Our local production accounts for more than 60 per cent of our annual sales revenue."