Panasonic to muscle into Indian refrigerator production
Electronics group targets market with double-digit growth
OSAKA -- Panasonic aims to start producing refrigerators in India in 2018, pursuing a bigger slice of a market with a major South Korean presence.
The Japanese electronics giant has budgeted roughly 20 billion yen ($176 million) to open two or three plants, envisioning a refrigerator supply chain serving all of India. By deepening ties with mass retailers in the country, it aims to triple sales there to around 1 million units per year, Panasonic's highest volume of fridges in any market.
Land and cost surveys have already begun, with construction to start by March, and operations to launch in 2018. Potential sites in India's northern state of Haryana, as well as Mumbai in the west and Chennai to the south, have been floated, with purchase negotiations to commence soon.
Panasonic sells roughly 350,000 fridges per year in India. Some are made at company plants in Thailand or Vietnam, with others outsourced to local Indian companies for production. The company will shift its supply from imported units to locally built ones as the new factories get up and running. Going local will both keep down production costs and drastically ease transportation expenses. With its new on-the-ground development capabilities, the company will also be able to tweak its products to meet the demands of the market.
The company is also considering hiring more local personnel to help reinforce its supply system to important Indian mass retailers. The aim is to draw retailers with the strengthened lineups of Panasonic-brand consumer electronics -- which also include TVs and air conditioners -- helping the company capture a larger slice of the market. This greater share would hopefully allow the company to hit a sales goal of 330 billion yen in India in fiscal 2018, double the fiscal 2015 figure.
In the Indian market, around 12 million refrigerators are sold every year. This figure is rising by 10% or more annually, and is expected to pass 15 million in 2020. Right now, around 80% of the market belongs to South Korean giants LG Electronics and Samsung Electronics, as well as two major Indian home appliance companies.
India's GDP grew by 7.6% in fiscal 2015, and is forecast to keep expanding at a good clip. Panasonic, intending to cultivate this growing market as a profit base on a par with Southeast Asia, currently has seven production plants there making home appliances such as air conditioners and washing machines.