Daizo Ito, President of Panasonic India Ltd, is convinced that the way for the Japanese conglomerate to succeed in India is to be Indian at heart and in manner and practice. So, Mr Ito, who's spent a little over three years in India, is looking to localise products, sew up alliances with Indian companies to develop software for Panasonic's energy management systems, and hire locally, with Japanese involvement at the minimum. (My successor could even be an Indian, he says!).
It irks Mr Ito that the $111.7 billion Panasonic Corp has a 10 per cent share in all the categories it operates in all over the world, except in India and Korea and he intends to do something about it. “The past three years Panasonic has been focusing on India. Our target is to get a 10 per cent share. We are not afraid of going head to head with the Korean brands but we will try to make a differentiation,” says Mr Ito, pointing to its hot-selling Cube air conditioner, a split AC being offered at the price of a window AC, helping eke out an 8 per cent share of the market for Panasonic.
This, Mr Ito says, was developed by Indian engineers and made at its Malaysian plant specifically for the Indian market.
Mr Ito, along with senior officials such as Mr Takumi Kajisha, Managing Executive Officer of Panasonic Corp, was interacting with a media team from India invited by the company to see its major facilities in Tokyo and Osaka.
Custom-made for India
Ask Mr Ito about the localisation strategy, he says earlier Panasonic would develop products for the European and US markets and then modify them for India.
“That approach was wrong for the Indian market, we completely changed that,” he explains. Its TVs, for instance, are engineered for louder sound as the local market demands it.
Bigger plans
While Panasonic intends to grow its business rapidly in durables – it aims to notch up a 12-15 per cent share in ACs, washing machines and refrigerators in a year's time – it will also look at dipping into its vast portfolio of products to increase its B2B presence with its medical equipment, surveillance and car audio systems.
Mr Ito says Panasonic is the largest car audio maker in the world but because of its status as an OEM supplier to many of the Japanese car majors its presence in the after market in India is not strong and is dominated more by brands such as Sony and Pioneer.
Panasonic, Mr Ito says, also intends to make a deeper foray into beauty and health care products with its shavers, curlers and epilators for which it has a tie-up with ModiCare to market certain products of its range through its network. While it markets its blood pressure equipment to hospitals, it will also look at making refrigerated systems for blood banks in the future, says Mr Ito.
The strengthening of the yen will not impact Panasonic in India, Mr Ito said, as most of its imports for its Indian operations are from Thailand and Malaysia.
Investment
Panasonic Corp, which intends to invest $ 200 million in India over a 5-year period, will get its plant in Jhajjar, Haryana, up and running by November 2012.
The plant can produce 10 lakh ACs, four lakh washing machines and 25,000 welding machine units annually.
The Indian affiliate which had revenues of Rs 3,200 crore last fiscal is targeting Rs 5,500 crore this year and will increase its workforce in India to 12,650 employees from the current strength of 10,500.