An early summer and an inspiring growth last year have encouraged consumer durable players to plan aggressive volume expansions. B&E takes a look at the ‘cool’ factors that will enable them to beat the heat by Neha Saraiya
Other fish in the ocean are also busy scaling up their production levels in order to meet the resurgence in demand. Ravinder Zutshi, MD, Samsung India is all set to double the company’s sales volumes in 2010 in the AC category to 1 million units and garner a market share of over 30%. In refrigerators, the market share target for Samsung has been set at 26%, and the company is looking at a 40% jump in sales volume in these two categories in this quarter. Even the Japanese AC player Hitachi is quite optimistic about its plans in India, which is quite evident from the aggressive stance of Gurmeet Singh (Head - Business Planning, Vice President), Hitachi India. The company not only inaugurated its third plant in Gujarat last year (a facility spread on a plot of 85000 Sq. Mtr. with approximately 35000 sq. mtr. of Industrial shed with an investment of Rs.500 million), to augment the production capacity to 4.0 lakh units per annum but is also laying major emphasis on increasing its presence in B & C class towns through an exhaustive network reach by an increase in the appointment of new distributors by 25-30%. In a similar vein, the management team at Whirlpool India is abuzz with activity; as they have been arranging extensive dealer meets since the past 6-8 weeks and are vigorously pursuing their plans to accelerate their volumes since the last 18 months. The company is currently a miniscule player in the AC category (as it sells just 1 lakh units per year currently), and is aiming to escalate the figure to 3 lakh units by end of this year.
In addition to utilising the hot summer months to come closer, or even beat, those ever stiff annual targets, the players have a definite long term agenda in mind as well. After all, in a high growth market like India, this is the right time to grab more market share; which can translate into better unit realizations in the long run; besides helping create a domino effect in the market if used properly. Over the near term, various industry bodies like ASSOCHAM and Ernst & Young are projecting that the electronics and appliances industry will reach a size of $40 billion by 2012 with a CAGR of 11%; and the question in front of each player is what their share will be.
The Indian white goods industry has been witnessing a paradigm shift over the past few years towards high-end and technologically advanced products. So while some players have been ramping up their production levels, others have been investing in better technology to enter the big league. For instance, a technology like 3D innovation is not just coming to TVs and cameras; but is also making its presence felt in refrigerators. Moon Bum Shin, MD, LG India reveals, “The revenues for us totaled Rs.12,500 crore in 2009, and this year we are expecting our India revenues to grow by 20% plus to Rs.17,000 crore in 2010. We have added 23 new models in the direct cool refrigerator category to our existing line-up and we are targeting a turnover of Rs.3,000 crore in the refrigerator segment by end of 2010.
Other fish in the ocean are also busy scaling up their production levels in order to meet the resurgence in demand. Ravinder Zutshi, MD, Samsung India is all set to double the company’s sales volumes in 2010 in the AC category to 1 million units and garner a market share of over 30%. In refrigerators, the market share target for Samsung has been set at 26%, and the company is looking at a 40% jump in sales volume in these two categories in this quarter. Even the Japanese AC player Hitachi is quite optimistic about its plans in India, which is quite evident from the aggressive stance of Gurmeet Singh (Head - Business Planning, Vice President), Hitachi India. The company not only inaugurated its third plant in Gujarat last year (a facility spread on a plot of 85000 Sq. Mtr. with approximately 35000 sq. mtr. of Industrial shed with an investment of Rs.500 million), to augment the production capacity to 4.0 lakh units per annum but is also laying major emphasis on increasing its presence in B & C class towns through an exhaustive network reach by an increase in the appointment of new distributors by 25-30%. In a similar vein, the management team at Whirlpool India is abuzz with activity; as they have been arranging extensive dealer meets since the past 6-8 weeks and are vigorously pursuing their plans to accelerate their volumes since the last 18 months. The company is currently a miniscule player in the AC category (as it sells just 1 lakh units per year currently), and is aiming to escalate the figure to 3 lakh units by end of this year.
In addition to utilising the hot summer months to come closer, or even beat, those ever stiff annual targets, the players have a definite long term agenda in mind as well. After all, in a high growth market like India, this is the right time to grab more market share; which can translate into better unit realizations in the long run; besides helping create a domino effect in the market if used properly. Over the near term, various industry bodies like ASSOCHAM and Ernst & Young are projecting that the electronics and appliances industry will reach a size of $40 billion by 2012 with a CAGR of 11%; and the question in front of each player is what their share will be.
The Indian white goods industry has been witnessing a paradigm shift over the past few years towards high-end and technologically advanced products. So while some players have been ramping up their production levels, others have been investing in better technology to enter the big league. For instance, a technology like 3D innovation is not just coming to TVs and cameras; but is also making its presence felt in refrigerators. Moon Bum Shin, MD, LG India reveals, “The revenues for us totaled Rs.12,500 crore in 2009, and this year we are expecting our India revenues to grow by 20% plus to Rs.17,000 crore in 2010. We have added 23 new models in the direct cool refrigerator category to our existing line-up and we are targeting a turnover of Rs.3,000 crore in the refrigerator segment by end of 2010.
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Source : IIPM Editorial, 2010.
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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