After joining hands in China, Egypt, Brazil, Argentina and Chile, US air-conditioning firm Carrier and Chinese appliances maker Guangdong Midea Holding have come together in India as well.
The new joint venture here — to be named Carrier Midea India Pvt Ltd — will target the estimated Rs 6,400-crore Indian home air conditioning market.
The Rs 500-crore joint venture will be funded 60 per cent by Midea and 40 per cent by Carrier.
The joint venture is part of an overall dual brand, dual segment strategy that the two are pursuing in emerging markets. While the Carrier brand will be slotted in the premium segment, the Midea range will be used to target the mass market.
Carrier Midea India's Managing Director-designate, Mr Krishan Sachdev said the joint venture company has already commenced work on its new manufacturing facility in Haryana, near Carrier's existing facility.
The upcoming facility, with a capacity of one million units per year, will be completed in the last quarter of the current calendar year, and the products will hit the stands well ahead of the next peak season (summer 2013).
However, till such time, Carrier's range of residential air-conditioners will continue to be produced at its facility. Once the new facility is up and running, the entire residential products of Carrier will come under the joint venture company.
“We are targeting a turnover of Rs 2,000 crore in three to four years' time,” Mr Sachdev added.
Asked why Carrier wanted Midea's collaboration when it has already established the brand in India with its manufacturing facility and distribution network, Mr Gaurang Pandya, Managing Director of Carrier India, said so far, Carrier has been largely oriented towards the commercial air-conditioner segment and had only a small presence in the residential category. “Also, we consciously stayed away from the mass market category as the company does not have any facility in India for large-scale manufacturing,” he admitted.
Midea, on the other hand, is the world's largest manufacturer, and outside of China, largely an OEM player. Its annual output is over 10 times India's market size, he explained.
In India, Carrier, which “consciously stayed away from home air-conditioner business”, is largely oriented towards the commercial segment.
According to Midea's filing at the Chinese Stock Exchange on January 6, last August the Chinese firm paid $223 million for a 51 per cent stake in Carrier's air-conditioner assets in Latin America, which included Brazil and Argentina.
Midea also acquired Carrier's Egypt business in October 2010, gaining access to products, brands and markets in Egypt and across Africa.