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Air conditioner industry

We are..

Debadas Patnaik Debashish Panda Deepak Kumar Lima Dibya Ranjan Sahu Gaurav Kumar Bhawsinghka

History
In 1820, British scientist and inventor Michael Faraday discovered that

compressing and liquefying ammonia could chill air when the liquefied ammonia was allowed to evaporate
In 1902, the first modern electrical air conditioning unit was invented by

Willis Haviland Carrier in Buffalo, New York


In 1906, Stuart W. Cramer of Charlotte, North Carolina, USA, was exploring

ways to add moisture to the air in his textile mill


Cramer coined the term "air conditioning", using it in a patent claim he filed

that year as an analogue to "water conditioning", then a well-known process for making textiles easier to proces

Feature
Traditionally, the main market driver has been the industrial sector Growing segments now include Commercial sectors viz. Software,

Retail, Healthcare, Hospitality, Entertainment, Telecom, Banking & other service sectors
Demand for comfort cooling in household and SOHO segment on

fast track
Significant new investments in technology & new capacities in

anticipation of market growth


Currently large unutilized capacities in the industry

AC Industry - market drivers


Service industry in India is growing at a much higher rate

than other sectors


Air-conditioning is a critical factor and essential for high

growth of the service sector


Penetration levels of air-conditioning in household less than

1%, despite being a tropical country


Need to provide affordable air-conditioning to the Indian

Citizen for high productivity, better quality and healthier life

AC Industry - global market sizes

USA10 million

Europe 2.7 million Middle East 1.8 million

Japan 9 million

China 14 million

India 1.2million

Value

performance of industry in recent year


Volume 000 units 18% 17% 26% 31%

Rs. Crores

2003

2004

2005

2006

2007

2003

2004

2005

2006

2007

Number of players
Amtrex Hitachi Blue Star Carrier Aircon Daikan Shriram LG Samsung Voltas Whirlpool OGeneral Matsushita

Market Share

Nature of competition
perfect competition

Differentiation practiced by different player


Voltas=low price Blue star=commercial Hitachi =higher group of people

The Indian air-conditioning Value Volume Applications Segment industry Rs 6000 540k nos Homes Window
ACs Mini Split ACs Ducted Split and Packaged AC Chillers and Central Plant Total market share crore Rs 2500 crore Rs 1500 crore Rs 2000 crore Rs 12,000 crore 220k nos 216k tons 272k tons Homes, offices, shops, showrooms Commercial establishments Industrial, institutional and large commercial

price

Blue star WAERs.121YC Rs.14,800 WAERs.091Y Rs.12,000 Deluxe WAM241R Rs.20,000 MHWRs.361RB Rs.51,200 2HW121YA Rs.22,900 4HW241YA Rs.38,900 4HW181YA Rs.32,700

Voltas Vertis gold split Rs 18,990 Vertis elite split Rs24,490 Vertis plus split Rs .16,490 Vertis plus window Rs 13,990

Hitachi
Hitachi RAV019EOD 1.5 Ton Window Air

Conditioner Price (Quadricool TM) Rs.25,400 Hitachi RAV024EOD 2.0 Ton Window Air Conditioner Price (Quadricool TM) Rs.29,500 Hitachi RAV014EMDZ1 1.0 Ton Window Air Conditioner Price (Quadricool) Rs.20,500 Hitachi RAV019EMDZ1 1.5 Ton Window Air Conditioner Price (Quadricool) Rs.24,400

India vs. China


Chinese retail prices are more than 60% lower than Indian retail prices Type of AC Indian price US$ 360 420 555 635 Chinese price US$ 136 185 199 280 This explains difference between Indian and Chinese statistics Domestic market India : 0.3 mn units China : 14 mn units Penetration

1 Ton
window 1.5 Ton window

India : 1% China : 20%


Exports India : Insignificant China : 5.9 mn units GDP RACs contribution to GDP in China is 4 times that of India
16

1 Ton split 1.5 Ton split

Threat Threat from from Substitutes Substitutes


Supplier Power Buyer Power Industry Rivalry

Threat from Entrants

Threat from Buyers


Lack of awareness Low income group High price Low penetration

Factors affecting demand


Poverty Low penetration(1%) High indirect tax High cost

References
www. wikipidia.com www.businesstandard.com www.customercomplain.com

THANK YOU

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