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Toshiba to produce air conditioners in India

Company switches from Thailand imports as currency and tariffs raise costs

TOKYO -- An Indian air conditioner joint venture between Toshiba and Carrier will begin local production next spring, switching from shipment from Thailand to cut costs.

Toshiba Carrier seeks to tap the Indian air conditioner market, which is expected to grow at an annual clip of more than 10%. In contrast, China is losing momentum as the world's largest market.

To curb expenses, the Japanese-U. S. joint venture will install production lines at an existing Carrier factory, investing 500 million yen ($4.5 million). Annual production capacity will be 10,000 units. The company has already set up an Indian unit near New Delhi.

India will be the third overseas production site for Toshiba Carrier, after China and Thailand. The company hopes to ship the output there to nearby markets like Sri Lanka.

The Indian plant will produce variable refrigerant flow systems, which combine a single outdoor unit with multiple indoor units. Demand for the energy-efficient systems is on the rise for use in luxury condominiums.

Rivals Daikin Industries and LG Electronics already produce this type of air conditioner in India. Toshiba Carrier is late to the game, but plans to cultivate the market by capitalizing on Carrier's sales channels.

The Indian market for variable refrigerant flow air conditioners is about 32,000 units a year. Toshiba Carrier has a little over 10% market share, and aims to raise this to around 25% in the early 2020s.

China accounted for nearly half of Toshiba Carrier's overseas sales in fiscal 2017. But as growth slows in the country, the company is broadening focus to other countries. It aims to generate more than 70% of its sales abroad in fiscal 2022, up from roughly 60% in fiscal 2017.

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