|Japanese electronics giant Panasonic plans to make refrigerators in India to tap into the huge market in the country where it is currently a marginal player. The company's India unit plans to invest Rs 250 crore towards setting up a manufacturing plant for refrigerators and is also drawing up plans for a unit to make mobile phones. |
Panasonic India and South Asia president Manish Sharma said the move is triggered by the huge market for refrigerators in India where the company has failed to make much headway in the last five years. "We are currently importing refrigerators from Thailand, which is not working for us. Once we have the factory, we will build more sales volume in that category.
Even today, the refrigerator market is the biggest in consumer durables, which is a big potential," said Sharma. The company is evaluating Jhajjar in Haryana and several locations in Maharashtra for the refrigerator plant, which will be functional in two years. It is also investing Rs 20 crore on an assembly unit for lithium ion batteries in the next 8-10 months at its existing facility in Jhajjar. Currently, Panasonic manufactures air-conditioners, televisions, kitchen appliances and welding systems in the country. Sharma said the market for televisions is about 10 million units annually, while for refrigerators it is more than 11 million.
He said as the refrigerator market is moving towards multi-door frost-free models, the average selling price is closing in on that of a high-end television. The company has also recently started local production of mobile phones through partnership with third-party manufacturer Dixon, which produces around 24,000 units per day. The company currently manufactures nine models but in six months will shift the production of all 12 models to India from China where only the premium models are manufactured. "We currently sell around 2-2.5 lakh units of smartphones a month and we will plan a fullfledged cellphone manufacturing unit once we cross the ten lakh units per month sales.
This can be either our own investment or through a joint venture," said Sharma. Panasonic India's sales grew 20% in FY16 at Rs 8,717 crore, driven mainly by television and air-conditioners, with the consumer electronics and home appliances business contributing Rs 4,000 crore. The smartphone business doubled last year to touch Rs 1,200 crore and the remainder was driven by the professional equipment and industrial product businesses.