Companies

Daikin to hold prices with an eye on market share

| Updated on: Feb 11, 2011

Unlike its competitors which have all increased the price of air-conditioners due to a 50 per cent hike in the price of steel and other inputs, Daikin Air-Conditioning India Pvt Ltd, a 100 per cent subsidiary of Daikin Industries Ltd of Japan, has decided not to increase prices of its range of 48 models in the coming summer in India, Mr Kanwaljeet Jawa, Managing Director, said today.

“For us this is a strategic decision as we want to increase our share in the Rs 9,300-crore Indian market from this year's 9 per cent to 15 per cent in the next three years,” he told Business Line here.

Daikin expects to increase its turnover from Rs 300 crore in the last calendar year to Rs 650 crore this year.

Gujarat, one of the largest markets for air-conditioners, buys three lakh air-conditioners annually, including 50,000 window (room) air-conditioners and 2.50 lakh split air-conditioners. Daikin plans to sell 30,000 room air-conditioners in the country this year.

The company is launching 20 new affordable products for the “common man” this year across the residential, light commercial and commercial segments through its 1,000 dealers and 200 Daikin Solution Plazas, he said. The minimum selling price for a 0.8-tonne air-conditioner would be Rs 24,000, whereas a 1.5-tonne model would cost between Rs 31,000 and Rs 42,000 depending on the star ratings.

Brand-building

The company will invest 5-6 per cent of the turnover on marketing spend towards a brand-building and awareness campaign. As part of its upcoming five-year business plan, Daikin India will also set up an R&D centre in the country to develop products tailored for the emerging markets.

The Rs 65,000-crore Daikin Group commenced production at its manufacturing plant on a 40-acre plot at Neemrana (Rajasthan) — one of its 47 plants globally — in April 2010. The company, which opened shop in India a decade ago, invested Rs 376 crore on the plant that can manufacture 20,000 Variable Refrigerant Volume (VRV) units and 1,800 chillers, he said.

The VRV technology, equipped with ‘intelligent sensors', automatically switches on the level of air-conditioning required in an area based on the number of people present, saving 30-60 per cent electricity. “This is Daikin's own patented innovation and we have a 52 per cent market share in India in this segment which we expect to increase to 65 per cent now.”

Daikin's range will now be available from 0.8-tonne units to 2,700-tonne chiller machines, that no other competitor manufactures.

Unlike others, Daikin produces its own air-conditioners as well as its own compressors and refrigerants. With its new models, the company expects to increase its share in the residential segment from 5 per cent to 9 per cent this year.

Besides, it is targeting to increase its 52 per cent VRV market share by 15 per cent and attain a 15 per cent share in the chiller category as well.

India's air-conditioning market is estimated to grow at a compound annual growth rate (CAGR) of 20-25 per cent in the next three years.

Published on March 12, 2018

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