Expecting to see revival in the demand of air conditioners (AC) during FY15, Carrier Midea India (CMI) is hopeful of logging a growth of 40- 50 per cent in its business. Confident of double digit growth in total market, CMI has ramped up its manufacturing facility and aims to increase production by 50 per cent as compared to the last financial year.
Talking to The Pioneer, CMI's Managing Director, Krishan Sachdev said, “ the last couple of years have seen static demand but now with economic situation improving, we expect the total market to increase by 10- 15 per cent.”
When asked what preparations the company has done to achieve the growth of 40- 50 per cent, Sachdev replied, “We have ramped up factory as well as distribution. On the manufacturing front, we have streamlined our production and build up an inventory while on distribution front, we have increased our retail outlet to 2,000 now.”
With its presence in 30 cities, the company aims to focus more on Tier II. As per the current data, nearly 3.4 million ACs were sold during FY14 but maximum sales were seen in the larger cities. With just 3- 4 per cent AC penetration in the country, Sachdev is expecting demand to now pick up from Tier II cities.
Another major strategy change for CMI came in the form of localization of products. “Currently, Carrier products are 100 per cent localized while Midea products are 85 per cent localized. This has been beneficial to the company as it has reduced our dependence on imported products. We also have avoided currency fluctuations through localizing our products,” he added.
With the assembly lines streamlined, the company is confident of producing nearly 50 per cent more products than last year. CMI currently has three product segments including ACs, Microwave Owens and water purifiers. With a state- of- the- art manufacturing facility, the company has an annual volume production capacity of 7,00,000, which can be expanded to 1,000,000 units.
When asked whether the company has any plans to expand manufacturing, Sachdev said, “our current factory has enough capacity and would serve us till 2016.” The company had recently hike prices of its products by 5- 10 per cent and going ahead, he feels there is nor reason to increase prices again.