'Eyeing 20% growth in Indian market', says Hitachi's Gurmeet Singh

ACs are not perceived as luxury items anymore, says Gurmeet Singh, chairman & MD, Hitachi Air Conditioning India

The summer is drawing close, and air conditioners are flying off the shelves. Hitachi India, part of the Japanese conglomerate Hitachi, wants to make most of it. And it also wants to become a big player in India’s growing consumer durables market. In an exclusive interview with Business Standard’s Pratigya Yadav, Gurmeet Singh, chairman and managing director, Johnson Controls-Hitachi Air Conditioning India, talks about the company’s plans. Edited excerpts:

Why are consumer durable companies so confident about a double digit growth despite high retail inflation and decreased consumers discretionary spending?

The industry is confident and is expecting robust growth this year for the air conditioners business. We are also expecting a double-digit growth especially due to the positive consumer sentiment in the market owing to pent-up demand created due to the lingering effect of the pandemic and the changing lifestyle of consumers.

The changed weather conditions -- longer summer seasons, uncomfortable and patchy monsoons are some other factors driving ACs sales. On top of that, this year is predicted to be one of the hottest in the past which will further push the demand for ACs across the country. 

Cities where usually ACs were not required are also experiencing the effect of heat, opening up new areas for the brands. All-season ACs and ACs delivering optimal indoor experience even in extremely high temperatures like 45 to 52 degrees are in good demand.

The commercial AC requirement has developed tremendously, especially with demand increasing for ACs for small commercial spaces. This has opened up a whole new avenue for the brands.  

Is this growth expected from the urban market or rural market will also contribute in a similar way? 

ACs are not perceived as luxury items anymore.

The penetration of ACs is going to increase in the B&C category towns too. Many aspiring consumers and first-time buyers are from these cities and towns.

The market across the country is developing in a very fast manner for ACs. Earlier, it was mostly dominated by the urban areas but now semi-urban areas and smaller cities are also increasingly gaining traction and contributing considerably towards business.

The rural pockets are yet to make a sizable mark for air conditioning businesses. However, we rationalise our prices as much as possible to offer the best prices to our consumers without compromising with the quality standards. For the benefit of consumers, companies are also extending schemes, offers and flexible payment plans to make it more consumer friendly. 

How is your business doing in India? Any further expansion plans? 

We are eyeing around 20 percent growth in the Indian market, hence we are constantly expanding our product portfolio. We already have a rich product portfolio of more than 80 stock keeping units and are adding more continuously. The company plans to have a 15 percent expansion of its existing 94 exclusive brand stores in India. Hitachi Cooling & Heating India’s 4 new exclusive brand shops were opened in Delhi NCR.

The retail footprint expansion is part of the company’s aggressive growth strategy to achieve more than 10 per cent market share targeting growth to the tune of 20 percent in the promising Indian air conditioner market. We have aggressive expansion plans for the north-Indian market.

Also, we recently launched an award-winning airHome series which has worldwide received immense response and recognition for its design and product innovation.

Investment plans of the company in the near future in India?  

India has been playing an extremely important role in the global business of the brand and Hitachi India plans to contribute $ 20 Billion (1.65 trillion rupees) in the overall consolidated global revenue for the parent company. The brand is also planning to invest Rs 150 crore in India in the next 2 years towards expansion of our manufacturing capacity, brand building etc.

The Indian facilities are not only being capacitated to cater to the domestic market but also to become a hub that caters to international markets. We are also supporting the ‘Make in India’ movement and are optimistic about the production-linked incentive scheme which would help in strengthening domestic manufacturing of components and would reduce manufacturing costs.