The Hindu Business Line : Daikin AC eyes high-end market

WITH the market for air conditioners in India seeing steady growth, Daikin Shriram Airconditioning, the 80:20 joint venture between the Japan-based Daikin Industries and the Siddharth Shriram Group company, SIEL, is looking to grab a niche in the high-end segment with its premium positioning of products.

"We are looking at a 10-20 per cent growth, as well as improving our market share this fiscal. Our sales last year were about Rs 150 crore. Though our products are priced higher than those of our competitors, we believe it is the industry quality and product innovation which drive growth in the premium end of the market," said Mr Toshiki Hayashi, the new Managing Director of Daikin Shriram Airconditioning, in an interview. Daikin claims to have a market share of 10 per cent in the split air conditioning segment.

Incidentally, Daikin's entry level pricing in the split air conditioning segment is upwards of Rs 35,000. The company currently imports all its products from Japan and assembles a portion of its split air conditioners at its plant in Silvassa, though Mr Hayashi said that production at the plant is quite low. When asked whether Daikin is looking to sell the Silvassa unit, he however replied in the negative saying that the company would like to keep the plant, as the taxation policies of the Government may change.

Mr Hayashi also said that Daikin is not looking to set up a separate plant in India for the time being. Daikin in the past had announced its intention to set up a separate manufacturing facility in India, after phasing out the Silvassa unit. "At present, it is less costly to import these products rather to make them here," he said.

The premium air conditioners segment in India is growing at the rate of 20 per cent per annum, as opposed to the 30 per cent growth being seen in the middle or lower end of the market.

Meanwhile, to push its products in the market, Daikin has decided to tie up with professionals such as architects and property consultants, rather than to advertise in the mass media. The company would be pushing a range of solutions such as cassette type air conditioners and the VRV technology through these tie-ups.

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