Voltas strikes a 50:50 joint venture with early-stage Atomberg Technologies to produce domestic high-efficiency AC compressors in Chennai, aiming to reduce reliance on Chinese suppliers and bolster supply chain resilience.
Voltas has turned to Atomberg Technologies in a fresh attempt to build a domestic supply chain for room air-conditioner compressors, a move that underlines both the strategic value of the component and the pressure on India’s biggest AC maker to strengthen resilience. The partnership comes as compressors account for roughly a fifth of an AC’s cost, making them one of the most important parts to localise.
According to reports on the new venture, Voltas and Atomberg have agreed to a 50:50 joint venture in Chennai to make high-efficiency compressors, with Voltas acting as the anchor customer. The proposed plant is expected to begin with annual capacity of 2.8 million units, and the venture will also have scope to sell to other room AC brands in the Indian market.
The deal matters because Voltas has tried this before. In 2022, it announced a separate compressor joint venture with Hong Kong-based Highly International, but that plan did not proceed after restrictions on Chinese investment in India complicated the arrangement. Industry reporting has also noted that the compressor market remains heavily dependent on two Chinese suppliers, Highly and GMCC, which has made localisation a persistent challenge for Indian manufacturers.
Atomberg brings some manufacturing experience, but the company is still early in compressor development. Its first compressor prototype was launched only in March and remains largely untested, according to the lead report. That raises questions over execution, even though Atomberg already supplies motors and electronics components to AC makers including Voltas, Godrej and Blue Star, as described in its draft filings.
For Voltas, the timing is awkward. The company has seen revenue decline in three of the last five quarters, while profit has swung sharply, even as room-AC sales rose 45% year on year and market share climbed above 17%, according to the lead report. The stock has remained near its 52-week low, suggesting that investors are still unconvinced that better sales alone will resolve deeper supply-chain and margin pressures.
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