Companies

Fujitsu General ends JV structure in India for direct operation, enter new AC segments

Our Bureau Chennai | Updated on January 21, 2020 Published on January 21, 2020

Etsuro Saito, President and Representative Director, Fujitsu General Ltd, Japan and KC Poovaiah, Head- Sales & Marketing, RAC, Fujitsu General (India) Pvt Ltd, at the launch of range of air-conditioners in Chennai on Tuesday   -  Bijoy Ghosh

Japanese company aims faster growth in its revamped avatar

Japan-based Fujitsu General, a leading manufacturer of air conditioners and other technology products, prepares for a new growth trajectory in its Indian air-conditioner business with joint venture realignment and entry into new product segments.

The company has ended its long-standing joint venture agreement with the Dubai-based ETA group for its Indian operations and henceforth will operate under a wholly-owned subsidiary Fujitsu General (India) Pvt Ltd, which was earlier known as ETA General.

Fujitsu General considers India, one of the biggest AC markets in the world, as one of the top priority markets in its mid-term management plan. After a feasibility study, it agreed to switch to a direct sales structure in the Indian market.

“The JV termination process is on and will be completed shortly,” Etsuro Saito, President, Fujitsu General Ltd, Japan, told BusinessLine here.

With the restructuring, Fujitsu General (India) aims faster growth in India after going through a period of stagnant years in the recent past.

New inverter ACs

The company has launched a new set of products in the 3-star inverter AC segment, which it avoided till recently as it focussed mostly on selling 5-star ACs and others in India at a price premium of 50 per cent or more when compared with the competition.

The decision to enter 3-star ACs, which is a fast-growing category in the Indian room AC market and make up about 40 per cent of the market, is to achieve faster growth and improve market share in India.

“These new models are designed to deliver cooling even at 55°C and have wide operating voltages range (155 to 280 Volts). These models will deliver cooling over 80 per cent of its rated capacity even at 46°C which means they have low de-rating effect,” said KC Poovaiah, Head – Sales & Marketing, Fujitsu General (India) Pvt Ltd.

Though the prices for its new 3-star inverter ACs, which have come in 1-tonne, 1.5-tonne and 2-tonne categories, not yet finalised, these products will not carry 50 per cent premium, but it will be lesser. “The lifespan of our products will be 2-3 times more than other brands in India,” he said.

Poovaiah said the company has planned to achieve a growth rate of about 50 per cent annually over the next 2-3 years in order to double its market share to six per cent (by volumes). It plans to sell about 300,000 units this year, driven by inverter ACs.

To a query on manufacturing, Saito said the company would be importing and selling its ACs in India till it reached a sufficient volume. Last year, the company had announced its plan to set up a factory, but it has been deferred.

Though the company’s products are sold through about 4,000 outlets across the country, it seeks to revise its sales channels fundamentally by launching retail stores with own direct operation and developing new dealers and distributors.

Published on January 21, 2020
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