LG, Samsung Lose Share in AC Mkt

Japanese AC makers Daikin, Hitachi and Panasonic eat into the market share of Korean firms

PRAMUGDHA MAMGAIN NEW DELHI

    Japanese air-conditioner makers Daikin, Hitachi and Panasonic have started eating into the market share of Korean firms LG and Samsung for the first time in a decade, thanks to aggressive pricing and launch of entry-level ACs.
While LG and Samsung together lost almost 5% of market share between January and May, the three Japanese firms were among the largest gainers, increasing their share to 11% from just over 9% during the period, shows GFK Nielsen India data. This was also the period when the country’s total AC sales more than doubled to 4.34 lakh units over January.
“Aggressive price cuts by the Japanese companies in the past one year have helped them increase sales volume,” said Ajay Bajaj, market leader LG Electronics India’s AC division head.
Premium players Daikin and Hitachi have launched lowpriced models to cut the price gap with the Korean brands to 10-15% from about 50% a year ago, and are supporting it with high-decibel marketing initiatives.
With just 3% households having an AC, there is huge scope for growth in the segment in the country. Growing at over 20% a year, the . 5,500-6,000-crore Indian air-conditioner market is expected to touch 3.6 million units this year. Split ACs account for twothirds of the market.
“We will continue to play aggressively in the volume zone,” Daikin Airconditioning India MD KJ Jawa said. Daikin launched 14 AC models this year with a starting price of . 26,000. Hitachi and Panasonic too have been expanding networks and portfolios as they target doubledigit market share in 2011.
The Koreans are feeling the pressure. “The game is getting tough. Competition has become intense with more players entering the entry and mid-price segment,” LG India National Sales Head Amitabh Tiwari said.
Samsung said its focus on highpriced split ACs in the past few months is also reflecting in the dip in its market share. “We are consciously focusing on split AC segment as users upgrade to split ACs,” Mahesh Krishnan, vicepresident (home appliances) at Samsung India, said.
LG, Samsung, Voltas, Videocon and Godrej increased AC prices 5-10% early this year to offset raw material price rise. Japanese companies were not affected because most of them import ACs, LG’s Bajaj said.