Air-conditioner maker Blue Star Ltd. will enter small towns and cities with a view to increasing its market share in the coming years, a top executive said. “We might end the current fiscal with a market share of 12.75% and are targetting 13% for the next fiscal,” B. Thiagarajan, MD, Blue Star Ltd., said. “By FY24, we would like to have a market share of 15%, for which we will be expanding into tier-III, IV and V towns and cities in the coming months,” he said.
Blue Star is likely to end the current year with sales of 6.75 lakh units and the next fiscal with 7.6 lakh units, he said.
The demand from smaller towns and cities are picking up. Having cricketer Virat Kohli as brand ambassador has helped in brand recall value, he said.
In this regard, the company, for the first time, has announced the launch of a new range of ‘premium-yet-affordable’ room air-conditioners, keeping middle-class consumers in mind. A one-tonne, three-star inverter split AC will cost ₹31,990 and a 1.5 tonne AC will be priced at ₹37,990, he said.
The company has also unveiled new models with features such as voice control and air purifier.
Asked about the impact of coronavirus on its business, he said the company would not face any production disruption till mid-April.
“But, there might be some impact after that on supplies of components from our overseas vendors. Even though we source our electronic components from Japan, the vendor, in turn, sources components from China. For other companies, it might be Vietnam, Korea or Thailand. This is a general problem faced by all AC makers,” he said.
He also announced that the company’s Sri City plant would be commissioned by the end of 2021 to cater to the room air conditioner market in the South. This would entail an investment of ₹120 crore in the first phase and another ₹120 crore in the second phase.
The board would meet during mid-2020 to decide on the structure of the Sri City plant as to whether it would be a separate company or a part of the existing one, he said. Mr. Thiagarajan said that the company had effected a 3-5% increase in the prices of room ACs due to hike in ocean freight. He also announced that they had increased the marketing and R&D spend by ₹10 crore respectively.
