Voltas, India’s leading air conditioner brand, has planned to foray into the air coolers business.
In an interview to CNBC-TV18, Pradeep Bakshi, president and COO, Voltas Unitary Products Business Group, said that with rising power costs, inflation and increasing tariffs on air conditioners, the product had become unaffordable for a large segment of the population whom the company will now cater to with its new range of air coolers.
"In the future, when these customers upgrade to ACs, after having tested us in the air cooler segment, they will surely look at us."
Below is the edited transcript of Pradeep Bakshi’s, interview with Shweta Kothari on CNBC-TV18.
Q:What prompted your company to venture into the air coolers space, after being a leader in ACs?
A: Air conditioners which we have expertise over since the last six decades they have been made available to a large chunk of our customers.
Over the last few years because of change in the government levies, the AC’s have become dearer, power, tariff have also become dearer and also because of inflation a general customer is not left with much money to spend on the discretionary product.
Therefore, we thought why should we not come up with a product which can fulfil the requirement of a general customer, a customer which is a middle income family where they want to chill their rooms but still they cannot afford because of reasons like power tariffs or rising inflation.
They are not left with much monies in their pocket therefore we thought we should come up with a product and we were trying to identify what is the gap between a fan and an air conditioner.
Therefore we came up with this thought that probably air cooler could be one particular product which can fulfil the requirement of these customers, which can provide them with necessary cooling and which can be affordable as well therefore this product has been introduced.
Q: What kind of growth does the company envisage in this new line of product?
A: Growth is still a long way to go, for this is just a humble beginning and we have been looking forward to this because industry has been growing largely.
In the last five years it has just got doubled, so compound annual growth rate (CAGR) of roughly around 20-25 percent has been made by the industry. We are also looking at similar kind of 25-30 percent of growth year on year (YoY) basis.
First year we will gun for at least 100,000 air coolers as we begin our journey in this direction.
Q: Voltas has primarily been into ACs segment, why this move now?
A: Because the cost is becoming dearer, air conditioning industry has not been growing at the pace it was growing couple of years back.
It is sort of a stalemate in this industry and even if the growth has been there it has been single digit growth only in some years and certain years it’s been above the flat line and therefore we thought probably we could encash upon this opportunity.
Not many branded players are available in this particular segment and of course there is a large population which stays in the rural areas where electricity is not available, where because of power tariff and inflation, people are not able to afford air-conditioner.
Therefore, we wanted to reach to those customers. In the future, when these customers upgrade to ACs, after having tested us in the air cooler segment, they will surely look at us.
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