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Daikin Airconditioning India plans to hike prices once more if the rupee does not stabilise at 64-65 to a dollar, according to Kanwal Jeet Jawa, the company’s Managing Director. The company had hiked prices by 5 per cent last month. “We are looking at operational efficiencies, supply chain and multi-tasking to tide over the issue,” he told Business Line . There was no choice if the rupee went close to 70 a dollar, he said. Domestic production and localisation had been to its advantage, he added. Earlier, its products came from Thailand.
Daikin set up its factory in 2009 in Rajasthan. Its turnover has risen from Rs 292 crore in FY10 to Rs 1,800 crore in FY13. “We have been growing significantly, but the slowdown in the last two months has been dramatic. Our first quarter growth has been 28 per cent compared to 50 per cent last year,” Jawa said.
Localisation costs
He conceded that localisation cost too had gone up due to inflation. Imported components constitute about 25 per cent, mainly compressors, cassettes and controllers.
The market share of the company in room air-conditioners is 12 per cent, VRVs (variable refrigerant volume system, where the refrigerant acts as the coolant) 49 per cent and chillers (where water is the coolant), 15 per cent. Daikin’s share in room air-conditioning was under 2 per cent three years ago. Its range starts from room air-conditioners to systems for villas, malls and airports. “We are doing 11 airports,” he said.
Jawa said the Chinese influx in air-conditioning was slowly coming down. Last year, against 30 lakh units sold, about 8 lakh were from China.
Many domestic companies import units from China and sell them under their brand names. “Many of those who import and brand them are losing out as they do not own the technology,” he said.
On pricing, he said since the commissioning of India operations, Daikin had become more competitive and today its prices were only 10-15 per cent more than the Korean companies.
Daikin has earmarked Rs 330 crore to expand into Tier 2 and 3 cities this year.
The company intends to set up another 100 more Daikin Plazas (exclusive showrooms) in addition to the existing 100.
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