industry analysis group 4

8/6/2019 Industry Analysis Group 4

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Air conditionerindustry


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We are..

Debadas Patnaik Debashish PandaDeepak Kumar LimaDibya Ranjan Sahu

Gaurav Kumar Bhawsinghka


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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 millCramer 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


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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 onfast track

Significant new investments in technology & new capacities inanticipation of market growth

Currently large unutilized capacities in the industry


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AC Industry - market drivers

Service industry in India is growing at a much higher ratethan 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 than1%, despite being a tropical country

Need to provide affordable air-conditioning to the IndianCitizen for high productivity, better quality and healthier life


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AC Industry - global market sizes

China 14 million Japan 9 million

USA10 million Europe 2.7 million

Middle East1.8 million

IndiaIndia1.2million1.2million


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performance of industry in recent

year ValueRs. Crores

Volume

000 units

2003 2004 2005 2006 2007 2003 2004 2005 2006 2007

18% 17% 26% 31%


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Number of players

Amtrex HitachiBlue StarCarrier Aircon

Daikan ShriramLGSamsung Voltas

WhirlpoolOGeneralMatsushita


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Market Share


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Nature of competition

perfect competition


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Differentiation practiced by

different player Voltas=low priceBlue star=commercial

Hitachi =higher group of people


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price

Blue starWAERs.121YC Rs.14,800

WAERs.091Y Rs.12,000

Deluxe WAM241R Rs.20,000MHWRs.361RB Rs.51,2002HW121YA Rs.22,9004HW241YA Rs.38,900

4HW181YA Rs.32,700


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Hitachi

Hitachi RAV019EOD 1.5 Ton Window AirConditioner Price (Quadricool TM) Rs.25,400

Hitachi RAV024EOD 2.0 Ton Window AirConditioner Price (Quadricool TM) Rs.29,500Hitachi RAV014EMDZ1 1.0 Ton Window Air

Conditioner Price (Quadricool) Rs.20,500Hitachi RAV019EMDZ1 1.5 Ton Window AirConditioner Price (Quadricool) Rs.24,400


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India vs. China

Chinese retail prices are more than 60%lower than Indian retail prices

Type of AC

Indianprice

ChinesepriceUS$ US$

1 Ton window

360 136

1.5 Ton window

420 185

1 Ton split 555 199

1.5 Ton split 635 280

This explainsdifference betweenIndian and ChinesestatisticsDomesticmarket India : 0.3 mn units China : 14 mn unitsPenetration

India : 1% China : 20%

GDP RACs contribution to

GDP in China is 4 timesthat of India

Exports

India : Insignificant China : 5.9 mn units


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IndustryIndustryRivalryRivalry

Supplier Power Supplier Power

Buyer PowerBuyer Power

Threat

Threat

from

from

Entrants

Entrants

T

hreat

T

hreat

from

from

Substitutes

Substitutes


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Threat from Buyers

Lack of awarenessLow income group

High priceLow penetration


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Factors affecting demand

Poverty Low penetration(1%)

High indirect taxHigh cost


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References

www. wikipidia.com www.businesstandard.com

www.customercomplain.com


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THANK YOU

industry analysis group 4

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