Wednesday, March 06, 2013

How about riding the green wave?

Though Carrier was one of the early entrants into the residential AC segment in the country, it somehow got overshadowed when rivals arrived. However, it’s clawed its way back into the sweepstakes by sheer market tactics. B&E does a walkthrough across Carrier’s strategic plants and plans

As we entered the production facility of Carrier Air-conditioning & Refrigeration Ltd (Carrier India) situated at Narsinghpur in Gurgaon (the plant is an exact replica of their China plant), we realise that we were venturing into a territory that had remained under wraps for years. There’s a reason we’re a-visiting the 20 acre plant. While at one point Carrier was the undisputed number one in India, with the likes of LG, Panasonic, Samsung, and even Voltas, Godrej, Videocon, Whirlpool et al coming into the AC market big time, Carrier’s market shares have steadily declined. Now, with a new MD, Gaurang Pandya, and with renewed efforts, Carrier claims to be clawing its way back – and we took up the offer of checking them out.

Our swift steps inside the plant are matched by Krishan Sachdev, Director Marketing & Strategy, Carrier India, who humours us, “People often ask us why our air conditioners (ACs) have larger structures than others? Our answer to this question is simple – we put in more components in our product.” This is actually that time of the year in the AC industry, when humour works better than anything else – well, sales start dipping at around this time of the year, and by the time winter hits, sales falls down to close to negligible amounts. This time around, while till the middle of the year, sales were growing at a thrillingly healthy rate of around 25%, due to the unexpectedly heavy monsoon, sales crashed within a month to abysmal figures across the industry. This is reflected in the Index of Industrial Production (IIP) too. While the consumer durables share of the IIP peaked at around 47% in June 2010, the same has fallen expectably to below 10% since then. But the year per se has been kind, what with the astounding heat wave experienced last year running into this year. As per Consumer Electronics and Appliances Manufacturers Association (CEAMA) figures, the AC market in India sold 3.5 million units in 2009; and has had a yoy growth of 15% this year. The Centre for Monitoring of Indian Economy (CMIE) reported recently that refrigerator and AC sales combined will rise at 24.4% for 2010-11 as compared to 18.8% in 2009-10.

MD Gaurang Pandya knows these figures by heart; and he’s betting on the fact that this year, Carrier’s sales (which makes up around 45% of the total India group sales of United Technologies, the parent company) will beat the forecasts. Although Pandya has just replaced Zubin Irani (who has been promoted to the position of Senior Managing Director of UTC Corporation in India) as MD of Carrier India, he is not new to the company. Pandya has in the past held many senior positions, hopping around functions like finance, operations, and sales & marketing. “I am really passionate about ACE”, says Pandya, 33, as we settle down in his office inside the factory premises. ACE stands for Achieving Competitive Excellence, and is Carrier’s in-house six sigma approach. “The difference between other approaches and ACE is that it’s more customer-centric. It takes inputs from the customers at all levels and then puts it back into the system,” he tells us. But is that enough to beat the flagrant competition? Pandya defends that this customer centric approach has helped Carrier India move ahead swiftly in the last few years (at a CAGR of 15%). For the financial year ending March 31, 2010, the company has recorded a turnover of Rs.8.9 billion and a net profit of Rs.835 million.


Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).

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