Ahead of summer, Daikin India, chairman and managing director Kanwal Jeet Jawa, speaks on the demand for air conditioners and the factors that will drive purchases. He says to Shoma Patnaik that this year will be another good year of sales for Daikin, one of the leading AC brands in India
Daikin, the global number one player in the air conditioning industry is ramping up its presence in Goa. The company during the week opened a Centre of Excellence in the Government ITI, Farmagudi, Ponda, for HVAC training under the Skill India initiative. It is also strengthening its office staff, increasing channel partners and enhancing brand awareness in the state.
Daikin India, chairman and managing director Kanwal Jeet Jawa, says that, Goa is an important market for air conditioners (ACs) because of its high per capita income. “The Goa market for room air conditioners is about 45,000 to 50,000 units annually. The state is seeing industrial development and also an increase in construction activities. Goa represents a growth area for us with a potential to grow bigger. Our intent here is to create the demand and grow the market.”
Jawa adds that, Daikin this year is celebrating its 100th anniversary globally while in India the company is completing 25 years. “This year is going to be a momentous for our company where we want to take advantage of the growing markets like Goa,” he says.
The CMD believes that, the AC market in India is getting evolved. “Unlike refrigerators or washing machines which are used extensively, the customer penetration in ACs is only 7 per cent presently. The low penetration offers lot of scope in a country like India which is hot and humid.”
He points out that, for many years ACs were seen as luxury industry in India. In 2018, however the thought process changed and manufacture of ACs were declared as a sunrise industry. It was given production linked incentive (PLI), encouragement for investing in R&D and since then the industry has been growing at 15-18 per cent annually.
During the COVID years the market was a bit subdued but it still grew and in the last two years it grew at more than 20 per cent. “The year 2024, was extraordinary for AC demand with the overall market growing by 25 per cent and Daikin sales increasing by almost 40 per cent, which is unbelievable. The industry will continue to grow for the next 2-3 years at 20 to 25 per cent per annum,” according to Jawa.
The Indian AC industry is growing because of structural changes taking place in the market. The, penetration levels are going up because of the improving buying power of the people. Moreover the heat stress is increasing. Further because of the Make in India programme, companies are increasing the scale of production, he says
According to Jawa, the latest technology, energy efficient ACs are being manufactured within the country. “There is lot of emphasis on sustainability and green technology. Previously lack of skilled technicians was one of the big growth barriers. Now companies are investing in training.”
In all about 300, 000 youth have been trained by the Indian AC industry to provide technicians for servicing ACs.
Daikin’s production capacity in the country includes five factories with total capacity of 2.5 million room ACs. The factories are operating at almost optimum capacity. The production emphasis is on lowering the import content in manufacturing. Daikin India component manufacturing is 60 per cent indigenized while in finished goods it is almost 100 per cent.
“India is Daikin’s R&D and manufacturing hub and it will soon become an export hub. Our factories here export to 30 countries globally. The ACs are designed in Japan while the production takes place in India after tweaking it to suit local conditions,” says the CMD..
The AC industry supports many industries of which the residential segment is the biggest. AC s are used in the pharma industry , cold chain sector, hospitality, data centres, automobiles, airports, etc. the infrastructure growth taking place in the country is an indication of the spread of AC usage. “There is no need for imports of ACs in India anymore,” says Jawa.
In 25 years the company has achieved a fast paced growth in India. Gloablly Daikin is a $ 31 billion company and head quartered in Osaka, Japan. From ACs for small bedrooms, to air conditioning of malls we cater to all markets,” signs off Jawa.
The all- India room AC market is estimated at 12 million in 2024, with Daikin overall market share at 20 per cent.
