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Daikin to sell 2 million units of AC in FY25, expand manufacturing capacity of compressors

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The company has already sold 7 lakh units of residential air conditioner (RAC) in the first three months of the year

New Delhi: Air conditioner maker Daikin expects to manufacture two million units in India this fiscal and has plans to scout for more export opportunities by making India a manufacturing hub.

The company has already sold 7 lakh units of residential air conditioner (RAC) in the first three months of the year, helped by a blistering summer this season and expects over 50% growth, said Daikin Airconditioning India Chairman and Managing Director Kanwaljeet Jawa.

Daikin, which has started its third manufacturing unit in India at Sri City in Andhra Pradesh, is investing in compressor manufacturing here and aiming to manufacture five million units by 2030.

“The mandate is of 5 million units, which includes 4 million units for the domestic market and 1 million of exports by 2030 and we are very confident,” Jawa told PTI.

The company is anticipating a “robust growth” in RAC volumes in the Indian market, which has a comparatively low penetration of around 7%.

“The India RAC market has already passed the inflexion point and is now come to the explosion stage. At the same time, prices have also come down and energy efficiency is also going up,” he said.

Besides, Daikin is also exporting to markets such as South Africa, the Middle East and South America helped by its new 75-acre Sri City manufacturing unit, which is the largest factory in South East Asia.

Daikin, which entered into the Indian market in 2004, has invested over Rs 2,000 crore so far.

For the financial year ended on March 31, 2024, Daikin India’s turnover was Rs 10,500 crore.

Daikin India, a part of Osaka, Japan-based world’s largest air conditioner manufacturer, also has plans to foray into the commercial refrigeration segment.

Besides RAC, the company is also expanding VRV Chiller for its HVAC business here, helped by local R&D and innovations.

“Now we sell more chillers than the next big three competitors put together producing in the country,” Jawa said.

Daikin had started domestic manufacturing of chillers in 2010.

“We were selling just 3,000 units in 2010 and last year, we sold more than the entire Asia and Oceania put together,” Jawa said, adding that “we have now more than 60% market share in the (chillers) segment. In RAC we had just 30,000 units in 2010 and this year, we are talking about 2 million room units”.

It’s a great story for Daikin, which held 6-7th spot in 2010, when the Indian market was dominated by Korean players.

“The RAC market was flooded by Chinese products in India. But Daikin decided in a big way. We put up our own manufacturing and R&D,” he said, adding that besides it also puts its own air conditioning development centre and skill centres. It has now become the second largest player in the fast growing RAC segment.

Currently, Daikin India’s more than 60% comes from the RAC segment and the remaining from commercial air conditioning.

However, going forward, it expects contributions from RAC to increase up to 80% in the coming years as the penetration of category increases.

Daikin has two manufacturing units at Neemrana in Rajasthan and one unit at Sri City, supported by three R&D centres here.

“We now manufacture ACs from sizes ranging from 0.75 tons to 2,700 tons in India,” Jawa said, adding that Daikin has the most extensive offerings in the Indian market.

The company is a primary investor in the PLI scheme floated by the government for the air conditioning sector.

The company has taken another 33-acre land in Sri City, where it plans to expand the manufacturing capacity of compressors.

Daikin plans to take the localisation level to 75% from the present 53% , helped by domestic manufacturing of compressors and PCB circuits etc.

With its third factory, Daikin India has a manufacturing capacity of 2.5 million units per annum.

Presently, Daikin has a presence in over 15,000 sales outlets and a network of 350 EBOs called Daikin Solution Plazas.

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