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Japanese consumer electronic and office automation major Sharp Corporation is in the process of rationalising its product portfolio in India, by temporarily dropping sales of some of the lower end products, which was not seeing good growth. The company, which is focusing on Air Conditioner and LED televisions for growth, is expecting to attain 7.5% market share in the country's AC market in the 2014 season.
Speaking to reporters in Chennai on the company's range of Inverter Air Conditioning products and the current activities, Sunil K Sinha, chief executive officer – India Region and Managing Directorof Sharp Business Systems (India) Ltd, said, “This year we are rationalising our portfolio by dropping some of the low performing products such as microwave oven, washing machine and some category of refrigerators. Our focus will be on AC and LED television market for the time being.”
The company has also reduced sales of the 22 inch and 24 inch LED televisions, focusing more on the range starting from the 32 inch LED televisions.
“The quality of material that goes into the Sharp products is almost 30% more expensive than the similar product available in the market. The consumer, who would see only the equipment as a whole would compare the price of the products without knowing this,” he said as one of the reason for dropping the select products. “We are not stopping those products, but dropping the sales temporarily,” he added.
The Rupee depreciation is another factor which made the company think about focusing more on the products which can be manufactured locally. The company has set up an AC manufacturing and LED television facility in Pune, with an investment of around Rs 170-200 crore. It has a capacity to manufacture 500,000 lakh inverter ACs a year, of which 100,000 units were produced last year. The company has stopped selling the normal split AC and is into manufacturing and marketing of inverter AC, which converts AC into DC power, which according to the company reduces the energy consumption significantly.
While last year the sales was around one lakh out of 3.4 million total units sold in the market, in India, the company is expecting a market share of 7.5% in a total market of the proposed 4 million units in the market season in 2014, he added. It had six models in AC last year and this year the portfolio has increased to 17 models now.
Besides, the company is also considering a plan to set up a refrigerator manufacturing plant in future, in India. While the requirement is for Rs 400 crore and it would be looking for fund raising, the company has not decided anything on this regard at present, he said.
The company, which reported around Rs 900 crore turnover last year, is expecting the turnover to be around Rs 1,000 crore owing to the rationalisation of products, which was started two to three months back is expected to complete in the next three months.
Sharp Corporation currently has three subsidiaries in India, which are Sharp India Ltd, the manufacturing firm which is a listed entity, Sharp Business Systems, which is into marketing of the products and Sharp Software Development India Pvt Ltd, engaged in developing software for Sharp's digital multifunction products.
