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Daikin focuses on expanding premium AC segment in India

21-May-2005
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Daikin focuses on expanding premium AC segment in India

Daikin Airconditioning India, a 100 per cent subsidiary of Daikin Industries Limited, Japan, has announced an aggressive business strategy to garner a larger market share in India. The company stated that its focus would continue to remain on the premium segment, which it would try to create and develop given the potential in India.

Announcing the company's plan for the Indian market, Hayashi Toshiki, Managing Director, DAIPL, said, "Over the last five years, we have maintained a price level without following the competition strategy of reducing prices. Our prices are higher than that of the competition. But then we cater to people who want a higher brand image and a superior set of offerings. They have higher expectations from the product."

Toshiki said that they had built the brand around the 'Complete Silence' platform after considerable research.

The brand enjoys a market share of 50 per cent in the Indian premium air-conditioning market, he said.

Explaining the logic behind the company's focus, Toshiki outlined that the company expected the Indian AC market to grow at 16 to 18 per cent, with the split AC segment growing at 23 to 25 per cent. In the premium segment, which is its focus, the growth is expected to be in the region of 30 to 35 per cent. The current growth of the split AC segment is said to be in the region of 28 to 30 per cent. With Daikin products being considerably higher priced than the entry-level market offerings, the company's strategy seems in sync with these projections.

Tayashi added, "We have registered a growth of 400 per cent in the last five years. We are geared to achieve a turnover of Rs 500 crore in the next years."

Daikin's international business is expected to contribute 60 per cent of its revenues in the current financial year. And the Indian market for premium air-conditioning, being relatively unsaturated, is something Daikin is betting on. The company is the market leader in Japan and the second largest in terms of market share in air-conditioning worldwide.

Daikin, which entered India in 2000, is looking at 2005-06 as a re-investment year. However, the spokesperson did not share information on spends on advertising and marketing initiatives.

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