A.O. Smith, the $1.7-billion US-based water heater manufacturer, has made India its priority market.
The Indian arm of the US-based manufacturer, A.O. Smith India Water Heating Pvt Ltd, plans to increase the annual capacity of its existing plant at Bangalore from the current 400,000 units to 1.2 million by 2013.
A.O. Smith India plans to put 15 per cent of its net sales into expansion. The company closed calendar year 2011 with $20 million turnover.
“The Indian market has huge potential. The electric water heater market in India is an annual 2 million unit market growing at 10-12 per cent. We currently command 9 per cent of the market share despite a limited product line-up and presence in India,” says Mr David Warren, Vice-President (Emerging Technology and Market Development), A.O. Smith Corporation.
A.O. Smith India imports some components from its facilities in China. “At present 85 per cent of our volumes is produced locally and the rest is imported. By 2013, we want to take localisation levels to 95 per cent,” added Mr Warren.
The company has also announced the introduction of five new water heaters for the Indian markets. Their heaters are available roughly in the range of Rs 2,000 to Rs 22,000. The company will be expanding from the current 135 cities in India to 160 by December. They have total of 2,500 touch-points across India.
The company’s 50 per cent of the annual business comes in the cooler months of October, November and December. January-June accounts for 20 per cent of their business.