Download - Air Conditioners - Product analysis
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Product AnalysisAir Conditioners
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Agenda
Product categorization
Industry structureIndian Scenario
Facts and figures
Major players
Market share
Strategies
Demand side
Supply side Strategies for growth
Future prospects
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Product Categorization
Room air conditioners: (RAC)
Window air conditioners
Split air conditioners Packaged air conditioners
Central air conditioners
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Industry Structure (2005-06) More of a utility item rather than a luxury item
A robust 19% growth volume aggregating 1.5 million units
Significant price reductions over the past 2 years Market dynamics: Negligible rural demand
Key drivers of growth
GDP/Capita growth
Reduced indirect taxes
Import duties
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The AC Market in India
20.40%
11.20%
25.60%
42.70%
Industrial
Ducted, Split andPackaged
Central
Room
Data pertaining to FY2006
Net Value: Rs 46.79 billion
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The RAC Market in India
30.20%
69.80%
Split
Window
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Sectorwise RAC Demand
15%
15%
15%20%
20%
5%10%
Small pvt sector
Public sector
Govt
Med and large pvtcosHousehold
Hospital
Small business
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39
27
22
32
28
28
1210
01020304050
North
East
West
South
Split
Window
Regionwise Distribution of RACs
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Share of Organized
Sector in RACs
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Major Players:
Units Sold and Market ShareCompany Units Percentage share
LG 500,000 33.3%
Voltas 200,000 13.3%
Samsung 180,000 12.0%
Videocon 130,000 8.7%
Hitachi 100,000 6.7%
Carrier 80,000 5.3%
Others 310,000 20.7%
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Product Portfolio
Comparison
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Focus
Product development
Aggressive promotion, has been the cornerstone of LGsstrategy
Positioning
Health Air system as a USP
New Initiative
Launched a range of commercial ACs targeted at the
corporate segment
Major Players #1 : LG
Electronics
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Focus
More on engineering excellence
Positioning As an original equipment manufacturer for global brands
like LG and Electrolux
New Initiatives
Launched new models targeted at the consumer segment.
Entered into a contract manufacturing agreement with Haier
for refrigerators and ACs
Major Players #2 : Voltas
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Focus
To differentiate itself on the basis of product features
Positioning Target the higher-value commercial market segment
New Initiative
Recently announced plans to invest US$5 million to
manufacture heat exchange components for ACs
Major Players #3:
Samsung Electronics
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Videocon International Limited
Differentiated its products by the launch of `Quadra Heat Exchanger
Technology, which claims to provide better cooling and economy
Carrier Aircon Limited
Commenced distribution of Toshiba ACs
Hitachi Home and Life Solutions Ltd.
Expanded product range - launched new models with technology
support from Hitachi, Japan
Implementing a new branding exercise at select dealer shops and
multiplexes in India, with the objective to enhance brand visibility
Major Players: Others
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Market Share in 2005-06
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Strategies for Growth
Facilitate growth in the domestic market
Position the AC as a productivity enhancer to deepen penetration in offices
Educating consumer on running cost of AC and ways to reduce it
Tie-up with contractors, architects to optimally design rooms for least AC
running cost
Facilitate growth in exports
Benchmark Indian plants to the best in the world
Understand best practices in operations and educate Indian players
Participate in tradeshows, conferences in target markets Work with government to shape policies
Ensure implementation of safety standards
Ensure national level quality/performance standards
Define clear procedures/paperwork for imports/exports
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Future Prospects
Rapid growth
Affordability
Higher temperatures
More value added models
Higher competition
Global players Removal of restrictions
Higher R&D