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Daikin expects to manufacture 2 million AC in India


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Daikin, the air conditioner maker, is expecting to manufacture two million units in India this fiscal year. The company aims to make India a manufacturing hub and is actively seeking export opportunities. In the first three months of this year, Daikin has already sold 700,000 units of residential air conditioners (RAC), benefiting from a particularly hot summer season. Kanwaljeet Jawa, the Chairman and Managing Director of Daikin Airconditioning India, expects over 50 percent growth in sales. Daikin has recently opened its third manufacturing unit in Sri City, Andhra Pradesh, and plans to invest in compressor manufacturing to achieve a manufacturing target of five million units by 2030.

Outlook for the Indian Air Conditioner Market

Daikin is optimistic about the growth potential of the Indian air conditioner market. With a relatively low penetration rate of around 7 percent, the market is at an inflection point and is expected to experience significant growth. Factors contributing to this growth include decreasing prices and increasing energy efficiency. Daikin anticipates robust growth in RAC volumes in the Indian market.

Export Opportunities and Manufacturing Facilities

In addition to targeting the domestic market, Daikin is actively exporting to countries such as South Africa, the Middle East, and South America. The company’s new manufacturing unit in Sri City, spanning 75 acres, is the largest factory in Southeast Asia and has facilitated its export operations. Daikin, which entered the Indian market in 2004, has invested over Rs 2,000 crore so far. For the financial year ending on March 31, 2024, Daikin India’s turnover was Rs 10,500 crore.

Expansion into Commercial Refrigeration and HVAC Business

Daikin India has plans to enter the commercial refrigeration segment and expand its Variable Refrigerant Volume (VRV) Chiller for its HVAC business. The company is leveraging local research and development capabilities to drive innovation and growth in these segments. Daikin has become a dominant player in the chiller segment, holding more than 60 percent market share. In the RAC segment, Daikin has become the second-largest player and expects the contribution from RAC to increase up to 80 percent in the coming years.

Manufacturing Capabilities and Localization Efforts

Daikin currently operates two manufacturing units in Neemrana, Rajasthan, and one unit in Sri City. With a manufacturing capacity of 2.5 million units per year, Daikin offers a wide range of air conditioner sizes in the Indian market, ranging from 0.75 tons to 2,700 tons. The company is actively involved in the government’s Production Linked Incentive (PLI) scheme for the air conditioning sector and aims to increase the localization level to 75 percent from the current 53 percent. Daikin plans to achieve this through domestic manufacturing of compressors and PCB circuits.

Sales and Distribution Network

Daikin has an extensive presence in India, with over 15,000 sales outlets and a network of 350 Daikin Solution Plazas, which are exclusive brand outlets (EBOs). The company is focused on expanding its sales and distribution network to cater to the growing demand for its products in the Indian market.

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