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Johnson Controls-Hitachi Air Conditioning India expects to record 15 per cent growth this year over last year on the back of a prolonged summer and increasing demand for consumer durables such as air conditioners and refrigerators.
It has also decided to invest $5 million (₹30-35 crore) on advertising this summer, increasing its budget by about 10 per cent over last year as the demand for air conditioners peaks this season.
With almost 90 per cent of its ₹2,000-crore sales turnover skewed towards air conditioners, Hitachi pegs itself as the one of the top five brands with a 12-13 per cent market share in the category.
“This summer we would be spending in excess of $5 million on advertising for both air conditioners and refrigerators. Every year we increase our ad budgets to reach out to more Indian consumers,” said Gurmeet Singh, Chairman & Managing Director, Johnson Controls- Hitachi Air Conditioning.
Almost 95 per cent of its air conditioners are being made in India at its facilities at Kadi, in Gujarat, where the company has a total installed capacity of 900,000 room air conditioners per annum. Hitachi, which is perceived to be premium brand, has been trying to cater to the mass market.
“Penetration is low at 4 per cent for air conditioners; we see the demand for the category will only go up in India. We have decided to consolidate our AC portfolio with the bulk of it comprising room air-conditioners,” he added.
But with with respect to refrigerators, which comprise about 10 per cent of its turnover, Hitachi would continue with its premium positioning as the category is entirely imported from its facilities in Thailand.
Due to high GST and import duties, Hitachi does not currently have the adequate volumes for it to start manufacturing refrigerators in the country.
“As of now, we will continue to import our high-end premium refrigerators as it does not have large volumes. For refrigerators, the import duties have remained unchanged and today it attracts a GST of 28 per cent with 10 per cent import duties,” he added.
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