The Hindu Business Line : Hitachi to keep off price war in AC market

THE Hitachi Home & Life Solutions (India) Ltd, a subsidiary of Hitachi Home & Life Solutions Inc Japan, has decided not to join the price war that is shaping up in the domestic air-conditioners market.

Even as certain players are talking of further slashing the prices of both the window and split air-conditioners (1.5 tonners) to levels close to Rs 15,000 and Rs 20,000 respectively, Hitachi has opted to plough a lonely path with only premium and niche products.

Talking to Business Line, Mr Rakesh Khanna, Senior Vice-President, Sales, Hitachi, said the company had taken a conscious decision not to get into low-end products merely for the sake of having a rounded portfolio.

Admitting that Hitachi still had only a 10 per cent share of the 1 million plus domestic market, Mr Khanna said that it was looking at innovations and `next generation' products to keep its market share.

"True, there is a move by many of the air-conditioner manufacturers to bring home the numbers by opening up the low end market through aggressive pricing. The only way we can counter it is by educating the customers that chilling is not the end word for air conditioners. We are offering intelligent machines that can factor in quotients like humidity and city specific requirements. Towards this, we are looking to work closely with interior decorators and even air conditioning consultants," Mr Khanna said.

The Gujarat-based company that is looking to take its top line from Rs 245 crore to Rs 280 crore in the current fiscal and turn an operating loss of Rs 7 crore into an operating profit of around Rs 10 crore, has just launched a model apiece in the window and split categories. And both have price lines that are way above what other players have on offer.

While the 1.5 tonne Quadricool comes at a sizeable premium at Rs 25,000, the USP is its silent operation and the claim of 45 per cent saving on power bills. Hitachi has also launched Sense-i, another split model to support its popular Atom with an aggressive pricing of Rs 34,000 as against Rs 40,000 for the existing model.

Even as the domestic air-conditioner is growing at an annual rate of around 20 per cent, Hitachi seems to be satisfied that it can just about keep pace. Clearly, the company is hedging its options by widening its base with India as an outsourcing base for West Asia and Africa. With 30,000 units out of the targeted 1,10,000 expected to come from exports in 2004-05, Hitachi India is looking to widen this window and reach 50,000 units next year.

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