Financial Daily from THE HINDU group of publications
Saturday, Mar 29, 2003
New Products & Services
Fedders sets foot in Indian AC market Plans to focus on visibility, target households
(From left) Mr Joseph Wang, Vice-President & Managing Director, Fedders Asia, Mr Arvind Mayar, Managing Director, Fedders International-India, Middle East, Africa, and Mr Daryl Erbs, Group Vice-President (International & Unitary), Fedders Corporation, US, at the launch of air conditioners in Mumbai on Friday.
MUMBAI, March 28
FEDDERS Corporation, the New Jersey-based air-conditioner manufacturer, has entered the Rs 2,000-crore Indian market with a range of products that will be priced lower than some of the premium brands and sport features specific to the Indian environment.
Among the products launched on Friday is a 1.25-tonne air-conditioner aimed at urban households, which seeks to fill a gap in the market that has 1-tonne and 1.5-tonne models.
"We aim to position this model as the entry product for densely populated urban areas, where there is shortage of space," said Mr Arvind Mayar, Managing Director, Fedders International (India, Middle East and Africa).
"The 1.25-tonne machine will involve less initial and running costs and is optimum for urban households."
The company is launching a limited range of air-conditioners and will initially focus its sales and marketing efforts in Mumbai, Delhi and Chandigarh, before expanding its geographical reach and product range, according to Mr Daryl Erbs, Group Vice-President, Fedders Corporation.
The company will focus on households rather than institutional sales. "Asia is the largest growth market, and the air-conditioner market is expected to grow from $12 billion to $30 billion in the next 10 years," Mr Erbs told newspersons.
"With the Indian market expanding at the rate of over 20 per cent a year, and market penetration estimated to be under 2 per cent, the country offers tremendous opportunities for growth."
The company, which makes and markets air treatment products, including dehumidifiers, humidifiers and thermal technology products, is re-entering the Indian market after 30 years, and without an Indian partner because the market today is very different, Mr Erbs said.
Fedders set up a manufacturing facility in Dadra in 2001 to make window and split air-conditioners; the factory now has a capacity of 300,000 units.
It also has an assembly plant in Himachal Pradesh and plans to establish India as a sourcing base for other markets. The company also has production facilities in the US, China, Philippines and Spain.
Customisation for the Indian market was required to handle the higher temperatures, frequent voltage fluctuations, and specific consumer preferences such as an air cleaning feature or additional protection against corrosion, Mr Erbs said.
"So, we have a more robust product which is also more efficient in power consumption," he added.
The company aims to be "a top tier player" in three years and is not looking at volumes growth this year, but at establishing visibility for the brand. A launch campaign, created by Enterprise Nexus, is slated to go on air next week.
So far, the air-conditioner market has been hamstrung by affordability and high running costs; at a more basic level, air-conditioners are not very high on the purchasing cycle, Mr Mayar said.
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