The worlds first ceiling wall air-conditioners was introduced to the domestic 7-lakh Indian air-conditioner market by Fujitsu General senior managing director Masayoshi Matsumoto, when the same was simultaneously launched across the globe. Incidentally, the $3-billion Fujitsu General manufactures the famed OGeneral air-conditioners that cools majority of the homes and offices in the Middle East.

For the domestic market, Stealth fits snugly between the ceiling and the wall and is an interior designers delight. In these days of high real-estate costs, precious living space is made available by taking the air-conditioning unit to the ceiling.

Unlike the normal wall-mounted air-conditioners, Stealth distributes airflow uniformly throughout the room and the user does not encounter a blast of cold air. According to Matsumoto, on the anvil is the Variable Refrigerant Flow system that provides high-energy efficiency by controlling the flow of refrigerant as necessitated by the room heat load condition.

About Stealth, ETA General chief executive officer M Ejazuddin says the target segment is commercial establishments like hotels and offices as the price point rules out the residence market. The 1-tonne model will cost Rs 53,500, while the 2-tonne is priced at Rs 59,000.

According to an industry official floor-mounted and ceiling-suspended models are losing against cheaper high-wall models. This is entirely a new product category that is far superior to others. We are exploring the possibilities of exporting from India to other SAARC countries, says Matsumoto. The SAARC market (save Pakistan) is estimated to be in the region of 1-lakh units per annum.

In India, the Japanese company, partnering with ETA Engineering, part of the $2.3-billion ETA Ascon, Dubai, has floated ETA General to manufacture and sell OGeneral brand air-conditioners (window and split) with the plant located in Pondicherry. While Fujitsu General holds a 31-per cent stake, ETA Engineering holds the balance.

Till date around Rs 45 crore investment has gone into the plant, says Ejazuddin. The investment includes the state-of-the-art paint shop inaugurated recently. The new investments are made having exports in mind. And as per the plans another Rs 60 crore investment is being planned in next two years time. The equity-holding pattern will remain the same, he adds.

Ejazuddin says the company hopes to export 5,000 units this fiscal, while the domestic sales are expected to be around 50,000 units. If one goes by the first-quarter trend, achieving the target is feasible. ETA General sold 24,000 units, earning a revenue of Rs 70 crore last year.

In the meantime, the retail market is witnessing a severe price war among players. The customer reigns supreme now with our margins getting squeezed hard, complains a Hitachi dealer. The window air-conditioner market is expected to boom with the prices going southwards.

And do not think that Indian industry players are overlooking the trend. For instance, Voltas recently launched Vertis, priced at Rs 17, 000. Even in the recent past a branded air-conditioner at Rs 20,000 was unthinkable. The Korean company LG is also playing by prices. The price is expected to further fall by another 7 per cent with players cutting costs on supply chain management.

The industry expects more models in the 0.75-tonne category with new aesthetics for grill designs. Upgrading from window to split is also expected to increase when the price of the former goes down. ETA General officials say the organised air-conditioner market this fiscal will be around 6.2 lakh units, of which 4.7 lakh will be accounted by windows and 1.5 lakh by splits.

The split segment is showing an attractive growth rate of 30 per cent, while growth in the windows segment is half of this. Even the residential segment is opting for splits instead of windows. Within the split segment cassettes are expected to show higher growth rates and will compete strongly with ductable splits.

ETA General, as a strategy, focuses on metro and mini-metro markets. While southern and western markets have strong preference for 1-tonne air-conditioners, there is an increased demand for 0.75-tonne ones in areas where space is at a premium. Demand for 1.5-tonne and 2-tonne is high in hot northern markets. The market is yet to develop in the eastern region due to its economic profile. We have stayed out of the price war, delivering quality for price, says Ejazuddin.

Continuing its two-year strategy of positioning its OGeneral brand at the premium segment, ETA General will launch top-line products like window air-conditioners with features like remote control, timer, feather touch control, sleep mode and others. Apart from these, the focus will be on the newly launched products like ceiling wall and cassette air-conditioners.