Daikin has gained market share rapidly over the past few years in India and is in the process of consolidation of domestic business, while transforming itself to serve as a regional hub for some select markets.
Kanwal Jeet Jawa, Managing Director and Chief Executive Officer, Daikin Air-conditioning India, part of the Japanese air-conditioning solutions major Daikin Industries, said: “The company has grown from a Rs 300-crore business to over Rs 3,200-crore business during 2016. Given the market potential, our plan is to tap into tier II and III towns in the country, we are looking at a target of about Rs 6,000-crore business by 2020.”
“Having consolidated the business presence from 2010, across segments of home ACs, VRVs and Chillers, we are looking at growing India manufacturing and business as a regional hub serving Sri Lanka, Bangladesh, Middle East and South Africa,” he said.
Jawa said, “We have been consistently gaining market share over the past few years across various segments and this would not have been possible but for the Rs 1100-crore manufacturing facility at Neemrana in Rajasthan, R&D center and a robust sales and distribution-cum-service network and over 450 solution plazas.”
Daikin is in the process of enhancing the manufacturing capability from 5 lakh units to 12 lakh units per annum. This will help it expand products portfolio.
“We manufacture all that goes into the AC, the compressor, refrigerant and PCBs through a sister concern. This provides us with a distinct advantage and helped gain market share. We now have a share of 15 percent in room ACs, 58 percent in VRVs (multi-split AC), and 15 percent in chillers. This works out to a market share of 17-18 percent in the country,” he said.
“A measure of how the commercial segment is doing for us can be gauged from the fact Daikin has bagged all the 20 contracts for air-conditioning awarded by airports in the country in the past couple of years. This would not have been possible but for the quality of products, holistic solution and service we extend to our customers,” he said.
Referring to the country's AC market estimated at Rs 20,000 crore, Jawa said it is estimated to grow by 10-12 percent but the Daikin sees itself growing by twice as fast in the domestic market. With Daikin transforming itself as a manufacturing hub for the region, it has already developed a network in Sri Lanka and Bangladesh and efforts are on to further strengthen it, he said.
Referring to the industry, he predicted a consolidation where smaller players will find the going tough. This will lead to mergers and acquisitions in the sector. And all those who thrived as assemblers will not be able to make headway in a very competitive business environment. Daikin teamed up with the Department of Mechanical Engineering of University College of Engineering, Osmania Universty, to set up a center of excellence. “This is part of our commitment to skill upgradation in India,” Jawa said. – The Hindu Business Line