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Sanyo-BPL plans low-priced durables foray

Sanyo-BPL plans low-priced durables foray

Author | Source: Business Line | Tuesday, Jul 04,2006 8:59 AM

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Sanyo-BPL plans low-priced durables foray

To step up TV sets production to target volume segment

Sanyo-BPL, which caters to the premium end of the market, will enter the volume segment soon while increasing annual production of television sets to one million units.

"We want to make some of our products far more affordable to consumers," a top Sanyo-BPL official told Business Line.

The official said as the company steps up its spend on the brand, it will start adding washing machines and refrigerators which are low-priced.

The joint venture is expected to introduce these models towards the end of this calendar year. The company is also examining a proposal to import low-priced washing machines and refrigerators from Southeast Asia to cater to the mass market. Sanyo and BPL have a 50:50 per cent joint venture in India.

The Bangalore factory of the company will also increase its annual production by 40 per cent to one million television sets this year, sources said. Currently, the white goods sold under the joint venture are priced at a premium range and hence it caters to a niche segment.

But with the decision to enter the volumes' segment, while at the same time catering to the premium segment, the joint venture is looking at higher market share in a sector dominated by LG Electronics and Samsung.

Keener competition

A market analyst said that the new strategy will in fact intensify the competition in the mass market segment.

"Even though one might put down the entry into the volume segment as a bit late in the day, BPL's brand recall is still good enough to drive their sales," the analyst said. He said the joint venture should capitalise on some of the advantages a Japanese company with an Indian partner brings to the table.

Sanyo-BPL has set a target of around Rs 2,000 crore in the first three years while it expects to turn around in two years.

In the colour television market, the joint venture company has set itself a target of 16 per cent share in volume terms and 20 per cent share in value terms.

The ORG figures as per December last year indicate that LG commands a market share of 26.6 per cent in the colour television segment, while for Samsung it is 14.1 per cent and for Onida it is 10 per cent share.

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