Durables majors target B and C class towns for growth

Mumbai, Jan 19 | Updated: Jan 20 2007, 06:21am hrs
Consumer durables MNCs have started to focus on increasing penetration of air conditioners (ACs) and refrigerators in B and C class towns in the first quarter of 2007.

According to industry players, of late, durables market has started witnessing a phenomenal demand in B and C class towns mainly due to real estate and construction boom there. To cater to the growing demand, LG Electronics India has started production of 2 lakh air conditioners (ACs) at its Pune facility in January 2007 which is expected to be expanded further to 6 lakh units soon.

Meanwhile, Samsung India has charted out new plans to increase its Dream Home road shows from 100 to 250 in B and C class towns. TCL India Holdings Private Ltd, a 100% subsidiary of TCL Corporation, China is appointing 200 sales and service (S&S) dealers in B and C class towns to start selling split and window ACs in these cities.

Ajay Bajaj, head ACs, LG Electronics India says, We are increasing our billing points from 2,200 to 2,600 in B and C class towns in the next two months. In the second quarter of 2007, we will also look at spurring more volumes of CTVs there. This year, we expect B and C class towns to contribute 70% of our total revenues of Rs 1,600 crore.

Durables market is witnessing a phenomenal demand in B and C class towns
Samsung has charted out plans to increase its Dream Home road shows from 100 to 250 in such towns
To cater to the demand, LG has started production of 2 lakh ACs at its Pune facility

Samsung India, which has gained 80% market share in side-by-side refrigerators segment and 23% share in frost free refrigerators segment (as per ORG data), has recently provided its frost-free refrigerators with Star Rating. According to Ravinder Zutshi, deputy managing director, Samsung India, We are introducing new models of frost free refrigerators. In the first quarter of 2007, we hope to sell 8 lakhs refrigerators and 5 lakhs ACs. Competitor LG India has 40% market share in ACs in A class metroes.

TCL India Holdings is introducing 20 new models of ACs which will include imports of split ACs from China and window ACs made at Baddi in Himachal Pradesh. CM Singh, chief executive officer, TCL India Holdings said, We are appointing AC specialists in all retail outlets in B and C class towns.