Allwyn and Kelvinator refrigerators are set to stage a comeback after Videocon took control of Electrolux's manufacturing facilities in the country. Venugopal Dhoot, chairman of Videocon Industries, has placed his son, Aniruddh Dhoot, in charge of the Electrolux brand, it is reliably learnt.
In the '90s, Kelvinator was a strong brand in the Indian market with an over 30% share, while Allwyn refrigerators had a strong brand equity in south India. The acquisition of the three white goods brands is expected to help Videocon shore up its volumes in the refrigerator and washing machines market where it has lost share heavily. The entry of the Korean majors LG and Samsung saw Videocon's market share in white goods plummet to less than 18% from over 70%.
Electrolux, as a result of this strategic partnership with the Videocon Group, will move from a subsidiary to a licensing model. The licenses will be managed through a new branch office of AB Electrolux in India which, together with Videocon, will promote the sales of Electrolux products.
Cost leadership, faster technology upgrades and the growing trade clout of Korean majors LG and Samsung have badly hit their market leadership. Industry sources said that the global restructuring of both the US and European white goods majors, Whirlpool and Electrolux, has helped the Korean companies notch up significant gains in India.
Owing to rising input costs, the prices of home appliances such as refrigerators, washing machines and air-conditioners have bottomed out after a sharp uptrend since early January '05. Promotions across categories have fallen significantly with industry majors such as LG, Samsung, Godrej and Whirlpool raising prices by 6-10%.