LAHORE, May 19: Several hundred workers employed by three window air-conditioner manufacturers of the country may lose their jobs because of an increased influx of the low-cost Chinese split units that have almost wiped out the demand for the former.

“Our production of window air-conditioners has dropped to 5,000 units this year from 30,000 only two years ago due to the drastic fall in the rates of the split air-conditioners. It’s obvious that we may be forced to shut down window air-conditioner facility next year, and retrench labour if the situation does not change,” says PEL’s General Manager (Manufacturing) Homaeer Waheed.

Chinese split units have almost taken over the local market in the last three years on the strength of their lower prices. Split air-conditioners (of 1.50 ton capacity) available in the market at Rs55,000-60,000 per unit a couple of years ago are now being sold for Rs25,000-Rs30,000 a unit.

As a consequence of their cheap rates, the Chinese split units have virtually wiped out the demand for window air-conditioners in the local market.

“We used to sell 75 window and 25 split units only a couple of years ago. Now the situation has changed, almost reversed, and we sell 75 split and 25 window units,” says Faheem Babar, a retailer at one of the biggest home appliances market — Abid Market — in the city.

It is in spite of the fact that the prices of the window units have also come down drastically. For instance, a window unit sold by a Korean company for Rs29,800 is now available for Rs19,400.

Babar says consumers also prefer split units because “they are considered energy savers”. But, he adds, the traders are fleecing consumers by selling to them low capacity splits as high capacity units.

“There’re many chances that you get a 0.75 ton split if you go to the market to buy a one ton unit without your knowing it,” he says. “So the consumers have to pay the same amount of power bill at the end of the day and live with less cooling.”

Although the split units have always been imported, they never posed a serious threat to the air-conditioner producers because of their high prices which rarely attracted majority of the buyers.

Forced by the increasing demand for the low-cost Chinese split units, the local window air-conditioner manufacturers have already switched over to trading and begun importing from China.

“It’s easier and keeps your brand alive in the market. You got only to import splits and put your label on them. We’re left with no other choice but to hope for a situation when we would also be in a position to start production of split air-conditioners,” says Waheed. “But when? Nobody knows.”

“You can’t compete with the Chinese products because they have flooded this country at dumping rates, destabilizing the market,” he says.

Though Waheed concedes that cheaper split units are benefiting consumers, he contends that their imports have “damaged the local engineering industry”.

“Traders are also the beneficiaries of this situation, and are thriving at the cost of the local industry,” he says. He says the local vending industry is also suffering because of the huge cuts in the production of window air-conditioners. Hence, he adds, “the job loss could be higher at the end of the day.”