It was a bad summer for most air-conditioner players this year, but Daikin India claims to have bucked the trend. Now, it is stepping up its investments by pumping in Rs 250 crore to expand operations.

Of this, Rs 122 crore is for a new home air-conditioning manufacturing line at its factory in Neemrana, Rajasthan. The new facility has a capacity to make five lakh room air-conditioning units annually. The rest of the money will be used “for dealer expansion, and strengthening operations”.

Till now, Daikin's main focus in India had been commercial air-conditioning, though it did have a marginal presence in home air-conditioning with a premium split AC range. Currently, 70 per cent of its revenues come from industrial air-conditioning and 30 per cent home air-conditioning.

Home penetration

In 2010, it started getting aggressive on the home market by introducing entry-level priced products as well. By going in for local manufacturing, the company hopes to increase its foothold. “In two years, we hope to get 70 per cent of our revenues from home ACs and 30 per cent from commercial,” said Mr Kanwal Jeet Jawa, Managing Director of Daikin India.

According to him, this is a strategically thought out move as home AC penetration in India is a mere 3 per cent. By contrast in markets such as Japan, Singapore and the US, 90 per cent homes have ACs. Even a market like Thailand has home AC penetration of 70 per cent.

The aggressive push into the home AC market, according to Mr Jawa, is also in a bid to gain overall market leadership position in the HVAC (Heating, Ventilation and Air Conditioning) market in India by 2015.

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