labels: Electronics - consumer, Panasonic
Panasonic on the resurgence trail news
Venkatachari Jagannathan
05 March 2007

Chennai: The Panasonic brand in India is being resurrected. One of the earliest foreign consumer durable brands (television, music systems) to have entered India - it was initially called National Panasonic and later renamed Panasonic, it lost market and mind share when low-cost Korean brands took over the market.

The reasons for Panasonic's decline were simple. The Korean brands were cheaper or at least perceived to be lower-priced and the Koreans outspent their better-established rivals on promotion.

Coupled with that Panasonic's Japanese parent, Matshushita Electric Industrial Company Limited, on the other hand didn't consider India an important market.

But times have changed and Matshushita Electric has redrawn its Indian strategy. The Indian operations were restructured. First an India Strategy Group was formed to help in the restructuring process and one of the key members is an Indian. The idea is to have the entire range of consumer durables and electronics used in a middle-class Indian home and ensure that every home has at least one Panasonic product.

A new company Panasonic Sales and Services India Pvt Ltd, a wholly owned subsidiary of Matshushita Electric, has been incorporated with its headquarters in Chennai.

Arjun Balakrishnan, director, operations, says, "The first part of the restructure exercise is to come to Chennai from New Delhi. As we report to Matshushita Electric's Singapore office, Chennai is a convenient location for travelling executives."

In terms of logistics Chennai is better than Delhi as Panasonic Sales will be importing products from its sister outfits in Malaysia and Thailand.

Secondly, a new management team with two key people, managing director Shrikrishna G Kulkarni and deputy managing director Hidenori Aso, were inducted. The company has over 100 employees now.  linked report below this one

Panasonic Sales will market consumer electronics (colour TV, plasma TV, LCD, imaging, car audio, car battery, music systems, home theatre and others) and home appliances like rice cookers, mixies, hair dryers, shavers, digital health meters and others. Panasonic companies make some of the products in India while others are imported. As a group Panasonic companies have a turnover target of $240 million this year. (See: Panasonic entities in India)

"Currently there is no move to unify the marketing functions. Except Panasonic AVC Networks India Company Limited and Panasonic Home Appliances India Company Limited, all other companies have their own distribution network. "Further the distribution dynamics vary from product to product and as such having a unified distribution set up is a difficult proposition," explains Balakrishnan.

With the corporate level restructuring getting over, Panasonic Sales has charted the brand's reentry into the Indian air conditioner market, this time in the split AC segment. Last August the company decided to wind up Matsushita Air-Conditioning India Private Limited that had been selling window-mounted air conditioners since 1997. As the market preference has changed to wall-mounted units, sales of window air conditioners had declined.

Says deputy managing director Aso, "Panasonic air conditioners have been officially certified and endorsed by more than 17 international quality standards organisations. Over 30 million customers in more than 120 countries are enjoying the comforts of our product." In Japan the brand commands a 21-per cent market share and in the ASEAN region Panasonic is ahead of the Korean and other brands with a market share of 30 per cent.

Targetted at the upper middle-class segment, the air conditioners come in three capacity ranges - 1 ton (price Rs32,000), 1.5 ton (Rs43,000) and 2 ton (Rs48,000). According to Kallol Chowdhury, head, air conditioners, the room air conditioner segment is growing annually by 20 per cent and 50 per cent of the market consists of the split model.

The ENVIO range of products with e-ion and patrol sensors will be sourced from Panasonic HA Air Conditioning (Malaysia) SDN BHD. "Based on the volumes we may look at making it here," says managing director Kulkarni.

The air conditioner also acts as an air purifier by discharging three trillion active 3-ions per second to detect and bring back dust, bacteria and viruses to the positively charged filter.

Interestingly the company will look at dedicated distributors for selling the product.

The next move is to launch washing machines, possibly imported from Thailand, followed by refrigerators. In the television segment, Panasonic is focussing on high-end customers with its plasma, LCD, home theatre models.

At the retail level, apart from selling the products through chains and individual shops, Panasonic Sales will have its own branded shops. "We have already two such shops-one each in Chennai and Bangalore- owned by franchisees. In four years time we will match Sony World in terms of numbers," says Balakrishnan.

Panasonic Entities in India
Company

Turnover
Rs. in crore

Matsushita's Stake - %
Products made/sold
Panasonic AVC Networks India Co Ltd
14
55
Cathode Ray Tube-CTV
Panasonic Battery India Ltd (formerly Matsushita Lakhanpal Battery India Ltd)
203
51
Novino brand batteries
Panasonic Home Appliances India Co Ltd (formerly Indo Matsushita Co Ltd)
61
50.99
Rice cooker, mixies, shavers, hair dryers etc
Panasonic Carbon India Co Ltd
33
51
Carbon rods for dry cell batteries
Nippo Batteries Co Ltd (formerly Indo National Ltd)
317
40
Nippo brand batteries
The last three companies are joint ventures with the Chennai-based Obul Reddy group.


 

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Panasonic on the resurgence trail