‘We are here to grow’
In this exclusive interview with Niranjan Mudholkar, Kanwal Jeet Jawa – Managing Director, Daikin India, says that his Company is now pursuing an aggressive multi pronged strategy to become a leader in the Indian HVAC market by 2015
You have set very high aims. What is driving this?
Daikin is a very highly process oriented as well as focussed company. When the Company entered in the global arena in the late 2006, the vision was set to become global leader. Prior to that Daikin was very strong only in Japan. It went about achieving its set goals both through organic growth as well as acquisitions. That goal was known as Fusion 2010. Now, we are looking at Fusion 2015. This is a strategic vision that will be our driving force for the next five years even in India. Accordingly, we are very clear that we want to achieve about 20% market share in the Indian air conditioning space.
The Neemrana facility will be the powerful engine of growth for us. I have been in the HVAC industry for 31 years and I have visited almost all the manufacturing facilities globally. And undoubtedly, the Neemrana facility is the best.
Which means now you are ready?
We are indeed ready. We have the products – the strongest and the biggest range from 0.8 tonnes to 2600 tonnes. We have the best of the people driven by vision as well as a strong leadership that believes in people centric management. Our dealership is also growing from Kashmir to Kanyakumari. In the last one and half years, we have gone from 290 dealers to 800 giving us a much better reach. We have plans to take this to 1500 soon. Also, we started focussing on brand building recently. We were focussed in the premium segment but now we are also targeting the mass market.
So, with world class systems in place, a comprehensive manufacturing base, an advanced R&D center, innovative products, brand awareness starting to grow, the best of people as well as a superb service infrastructure, we have everything required to achieve our goal of market leadership.
So the investment in room air conditioning manufacturing is in line with your vision?
Yes, this second phase investment shows our commitment to the Indian market and is very much in line with our vision to develop and market a product specifically designed for the Indian consumers. Also, the philosophy to leverage localization to drive profitability remains a core strategic intent of Daikin Industries. The new Residential AC facility will equip us with a competitive edge in terms of brand and product. As the new factory carries a mission to deliver product high on performance, yet affordable and this will be Daikin India’s market defining product.
What is your current market share?
In the room air conditioning segment, we have 7-8%. In VRV, we are close to 52% where we dominate the market. And in chillers, we are about 12%.
Will you add new products? What will be your positioning strategy?
Yes, we are consciously adding new products – for example, with R410 inverter, with R22 inverter. We have a four tiered positioning strategy in this regard. First is the premium segment, where we continue to dominate the market. Secondly, we have the R22 inverter products, which is the replica of what is available in the developed markets. Thirdly, we have the five star products where energy efficiency has been the name of the game. And now we also have air conditioning for the common man, which is value for money. In India, we are probably the fastest growing air conditioning company. Despite a cool summer and despite the other market leaders degrowing, Daikin has grown in this market.
You have called this year as the ‘year of disruption’. What do you mean by that?
Basically, we want to announce in the market that we have arrived. Last year was the ‘year of eruption’ when we made inroads in the market successfully. This year, we want to consolidate our position in the VRV segment, we want to expand our reach in the chiller expand and in the residential segment we want to be in the top 3. The next will be ‘year of explosion’.
The market penetration in India is only 3% and we see this as a huge opportunity. Now, we know the market and are well positioned to leverage the market conditioning. We are here to stay and we are here to grow.