Voltas attempts to retrieve lost glory
By Our Corporate Bureau | 23 Mar 2006
Kolkata: Voltas, the venerable fridge and air conditioner maker from the Tata Group, is trying to win back some of its glory lost to multinational entrants like LG, Samsung and Hitachi in the last decade or so. The company that had a 40-per cent market of the air-conditioner market till the '80s is preparing a strategy that includes acquisitions, tapping markets in smaller cities, launching sub-Rs10,000 room ACs and re-energising channel partners according to K J Jawa, senior vice president, Voltas. He said, Voltas, as part of the group strategy, was open to any acquisition proposal.
He said the domestic Rs2,000 crore air-conditioning market has as many as 17 brands, most of which belong to multinationals. He added that Voltas and Videocon were the only two Indian companies left in the field.
According to a study by McKinsey, the size of the air-conditioner market in cities with a population above a lakh, currently estimated at 1.2-million pieces, would increase to three million by 2010.
Voltas is aiming for a higher market share from this market and plans to price its air-conditioners in a more affordable price bracket as well as expand its dealer network from 2,000 to 3,500 and strengthen its franchisee spread to penetrate the market.
Jawa said Voltas is targeting a 20-per cent share of the windows air-conditioners market against its 16 per cent share at present.
The company has invested Rs120 crore to set up a plant in Pantnagar in Himachal Pradesh to expand its market in rural areas.
The company is hoping its new window and split air-conditioner launches priced at the middle class will enable it to grab a higher market share during this financial year, paving the way to becoming the leading Indian company in air conditioning.
According to Jawa, the company has achieved a growth of 50 per cent in Eastern India. He said Voltas is ready to target the top spot by introducing ''India Ka AC'', the new range of air conditioners, which will be supported by aggressive marketing strategies.
Last year, for the first time ever Voltas introduced a range of air conditioners below Rs10,000 which were affordable and accessible for a large section of Indian households.
According to Jawa Voltas is on a mission to transform the way air conditioners are marketed in India. In keeping with this the company unveiled its new marketing campaign for this financial year. ''We have earmarked an amount of Rs20 crore as marketing expenses in addition to Rs6 crore for retail expansion," he said.
Jawa said the company plans to sell, 300,000 room air conditioners in the rural sectors by 2010. Apart from capturing the Indian market, Voltas has also plan to expand its business overseas.
Voltas which is also into exports in a major way, will start from June 2006 phased commissioning of its new Rs120-crore plant at Pantnagar in Uttaranchal. Its present facilties are located in Hyderabad and Dadra.
The company has decided to set up three plants in Uttaranchal at an investment of Rs120 crore to augment its export market in the Middle East. The factories, to be set up at Panthnagar, would manufacture commercial refrigeration systems, room air conditioners and central air conditioning systems.
As part of its focus on air-conditioners Voltas has decided to discontinue making refrigerators for the home segment. Earlier the company was test-marketing 55-litre refrigerators for this segment under the Coldcell brand in 11 cities, but decided to exit in view of the slow growth in the refrigerator category and also because of its agreement with Electrolux according to which the Tata company can sell refrigerators under the Voltas brand only after September 2007.
