AO Smith aims for 6.5% share in the Indian market by 2009

Economy Bureau
Posted: Monday, Nov 17, 2008 at 0121 hrs IST
Updated: Monday, Nov 17, 2008 at 0121 hrs IST

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Kolkata, Nov 15 : North America's leading residential and commercial water heater manufacturer $2.3 billion AO Smith, which started selling residential water heaters in India from July 2008, targets a 3.5% share by the end of the year in the Rs 650 crore Indian market for such heaters.

The plan is to touch 6.5% by December 2009.

"At present, we are importing all the residential water heaters from our manufacturing unit in China, but by 2010 we are going to set up a manufacturing unit in Bangalore. About 20 acres would be handed over to us by the government next month to set up the unit in Bangalore," said Tamal Chaudhuri, national sales & marketing manager of A.O. Smith India Water Heating Pvt Ltd.

The demand for such heaters is greater in north India, with consumption at about 40%, because of very cold winters, he added.

Water heater sales in the country last year were at around 1.6 million units with north India recording the highest number.

About the eastern region Chaudhuri said: "It is the most conservative market and the purchase rate is only about 8% as winters are not that cold over here."

A.O. Smith's residential heaters, which vary from six to 100 litres, are in the price range of Rs 5,200 to Rs 21,000, said Chaudhuri.

The company has 40 manufacturing facilities around the world with presence in 160 countries. "In India, we are present in 10 cities,"he said.

When asked about the effect of US recession on the sales of A.O. Smith, he said: "Usually, we grow more than 5% every year but owing to the financial crisis, our growth would be down to 2-3% this year."

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