Panasonic scouting product allies in India

Panasonic India, a subsidiary of Japanese electronics maker Panasonic Corporation, on Tuesday said it was actively looking to forge collaborations with Indian companies for developing consumer electronics and appliances to suit the local needs.

Daizo Ito, president, Panasonic India, told DNA that the company was talking to several Indian companies for back-end activities and product development by utilising their insights of Indian consumers and capabilities of economies of scale.

“We are looking to forge Japan-India collaboration in the space,” Ito said without elaborating further, citing non-disclosure agreements.

Last week, Panasonic formed a partnership with Tecumseh India, the largest manufacturer of compressors for air-conditioners and refrigerators.

Tecumseh that has partnerships with companies such as Whirlpool, Voltas, Videocon, Haier, LG, Carrier, and Blue Star, is supplying compressors to Panasonic for its direct cool refrigerators to be built in India. Panasonic has already formed an alliance with a local partner for manufacturing the refrigerators in the country and will be launching the range in a month.

Ito said that Panasonic faces competition from Korean companies such as Samsung and LG and needed to fasten the pace of growth in markets like India.

“In future, India will be the core centre for worldwide business. We can cover Middle East and Africa from India in the future,” Ito said, adding, “We are seeing fast growth in China and are now keen to drive growth in India. Also, growth in developed markets is under 10%.”

Last week, a Reuters report quoted Panasonic Corp president Fumio Ohtsubo saying that North America and Europe were not expected to show any strong recovery in consumption over the crucial year-end sales. Panasonic India contributes 1% to the group’s global turnover.

“The intention is to become a $2 billion company in India by 2012,” said Manish Sharma, director, marketing, Panasonic India.

The company will also be leveraging the distribution penetration of Anchor Electricals, a subsidiary of Panasonic Corp that makes switches in the Indian market, to promote its small-ticket value products.

“In bigger towns, the market is evolving rapidly on the retail front. There are major retailers that run multi-brand outlets, we would like to utilise that channel also,” Sharma said.

Over the last year, the company has decided to focus on developing India-specific products at price points that cater to both mass and premium segments.

In air-conditioners, for example, where the company was earlier only focusing on Rs22,000 upwards range, it has launched new products in the Rs15,000-20,000 bracket.

The company is looking to expand its portfolio in the hair and beauty grooming and lifestyle space too.

The group has invested as much as Rs400 crore (14% of its revenues in India) in the country this year.

Currently, Panasonic is importing all appliances from Indonesia and Thailand. It will start manufacturing air-conditioners and washing machines post March in 2012 at its upcoming unit in Haryana.