Daikin to spend Rs 5 cr on marketing initiative

Daikin Airconditioning India, a wholly-owned subsidiary of Daikin Japan, plans to spend Rs 5 crore on publicity and marketing initiatives during the current financial year.

Addressing mediapersons Hayashi Toshiki, managing director, Daikin Airconditioning India Pvt Ltd, said that the company will continually spend a budgeted minimum of Rs 2 crore for the next three years to promote its brand.

Toshiki pointed out that in India, split air-conditioners are growing at 28 to 30 per cent. However, the market is still dominated by window air-conditioners occupying as large as 70 per cent of the market. On the contrary, a substantial chunk of over 70 per cent of the global air-conditioners market is accounted by split air-conditioners.

"India is a very important market for Daikin as overseas contribution from Asia is just 4.2 per cent which we envisage to grow as markets like US and Europe have become saturated," he added.

When asked whether the company will be setting up a manufacturing plant in India, Toshiki said that since the company is operating in the high-end segment, it finds importing from Thailand and Japan and assembling components in India, cheaper.

We would set up a manufacturing plant when there is economies of scale, he said adding, that it's unlikely to happen before 2010. Daikin had to shut down its manufacturing plant in Mumbai during 2003.

When the company Daikin Shriram Airconditioning Pvt Ltd was set up in 2000, Daikin Japan had invested about 80 per cent of Rs 19.5 crore equity in the joint venture. Daikin acquired 20 per cent stake in Siddarth Shriram group company SIEL, thereby making it a wholly-owned subsidiary of Daikin Japan during November, last year.

Daikin had pumped in about Rs 40 crore in March to wipe out the losses made by its Indian subsidiary. Toshiki said that the company is expected to break-even at the end of the current financial year. Daikin India clocked a turnover of Rs 140 crore in 2004-05.

Daikin's 1.5 tonne air-conditioner is priced at Rs 50,000 and its lowest .75 tonne is priced at 30,000. The company also plans to launch a smaller version "" .5 tonne ""for the Indian market.