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Japanese air-conditioner maker Daikin India is on an aggressive growth path and has closed the 2016-17 fiscal with a turnover of about ₹3,300 crore , growing at18-20 per cent. The company said it aims to grow at a similar rate this year and will start scouting for a location for setting up a third factory.
Kanwal Jeet Jawa, MD, said the growing acceptance of inverter ACs in the country, product innovations with ecologically sustainable technologies and investments in the research & development centre had helped the company achieve this growth. “We have moved from prominence to dominance. India is one of the fastest growing markets for Daikin globally, and we are investing substantially in our operations. We are looking to grow at 18-20 per cent this year too,” he added.
Jawa said factors such as increased penetration levels, government’s push for goods and services tax (GST) and rural electrification will help in the growth of the AC segment.
Aiming to be a lead player in the room AC segment, the company has been focussing on ramping up its distribution network and manufacturing capacity.
Daikin India began the construction of its second factory at Neemrana, Rajasthan, last year, and aims to make its second plant operational by September.
Jawa said this would help the company make India an export hub. “We have already opened sales offices in Sri Lanka and Bangladesh. Besides SAARC nations, we will also look at exports to markets such as West Asia and Africa,” he added. The company will be scouting for a location for a third factory once it gets more clarity on GST.
The domestic AC market has begun witnessing a shift toward inverter ACs this summer. According to a Motilal Oswal analyst report, for Daikin India, inverter ACs account for 25-30 per cent of its sales, and this is expected to rise to 50 per cent in FY-18.
The report said the company had already reduced the price gap with peers to 10-15 per cent and aims to further narrow this to 5 per cent.
Though Daikin India is reducing the price gap with peers, it intends to retain some premium. The company has also been focussing on higher localisation, increased distribution reach and improving brand visibility, it added.
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