Consumers are yet to feel the full-blown heat of the summer season, but major consumer durable manufacturers like LG, Godrej, Whirlpool and Samsung are not taking any chances. They are already chalking out their air-conditioner (AC) segment strategies to enhance market shares.
The AC industry sells 3-4 million units annually and rakes in a revenue of Rs 6,000 crore. While a price hike of 2-5 per cent is in the offing due to escalating steel and copper prices and an increase in value-added tax (VAT) in select states, leading consumer durables companies are harping on new features and technology to justify the higher product pricing and range.
Whirlpool, for instance, will launch a total of 44 ACs this summer season. It has launched 35 new models, priced between Rs 21,000 and Rs 33,000 for split ACs and between Rs 14,000 and Rs 21,000 for window ACs. Vice-President (Corporate Affairs and Strategy) Shantanu Dasgupta says: "We expect our 2010 AC sales to touch 300,000 units, which is three times what we sold in 2009. We are also targeting a market share of 15 per cent by 2012, up from 5 per cent right now."
Whirlpool has also earmarked Rs 10 crore for promotional activities this year. Dealer network for Whirlpool ACs will also increase to 1,500 in 2010 from 500 outlets at present.
For LG India, the growing demand for ACs is expected to push its air-conditioner business to Rs 2,500 crore, or nearly 20 per cent of the estimated Rs 12,500-crore turnover. This marks a 50 per cent increase in sales at an estimated 1,250,000 units in 2010, compared with 800,000 units sold in 2009, according to Business Head (ACs) Ajay Bajaj. The company also expects its market share in the AC segment to increase from 29 per cent last year to 32-33 per cent in 2010.
LG is expected to spend nearly Rs 25 crore in 2010 on marketing its ACs. LG India is also in the process of adding more dealers. Overall, the number of retail dealers is expected to go up to 1,800 in 2010 from 1,600 in 2009, while the number of specialised dealers for ACs will touch nearly 700 this year, up from 500 last year.
Likewise, Godrej & Boyce is looking at 20 per cent sales growth in ACs during the summer season. Vice-President (Marketing) Kamal Nandi says: "We have lined up around 10 new AC models for launch this year by April. We have an 8 per cent market share at present and we are targeting 10 per cent of the AC market by summer 2010."
Godrej is also increasing its dealer network in India. Its products are available through 6,000 outlets currently and, by April-June 2010, the company will add 1,000 more outlets.
Samsung Electronics, on its part, will introduce over 20 models in split and window AC segments this summer. The company recently invested $5 million (over Rs 23 crore) in its Chennai plant to start production of split ACs in India. At present, the plant can produce 600,000 ACs per annum.
