The Rs 385 crore Carrier Aircon was the market leader in the RAC segment with a 21 per cent share in window ACs and 35 per cent share in split ACs. With the entry of the various other multinational brands, there has been intense price-cutting, thus taking a toll on Carrier’s performance for FY00.
However, for the first nine months of FY01, net sales at Rs 351 crore improved 21 per cent as compared to the corresponding previous period. Also, thanks to efforts at cost cutting, total expenditure as a percentage of sales has reduced 300 basis points as compared to FY00. Despite rising working capital requirements that has led to a 57 per cent jump in interest at Rs 3.71 crore, net profit at Rs 16.76 crore is 83 per cent higher than that for FY00. The improved performance is largely due to Carrier’s initiative at adopting a different pricing strategy. From a distinct shift from marketing ACs only at the premium end, Carrier started targeting the lower segments of the market. Consequently, compared to previous price points of Rs 25,000 to Rs 32,000, it now caters to a price range of Rs 18,500 to Rs 32,000. It marketed 41 new variants of window ACs during FY01 as against 11 models in FY00. Also, while advertising budget has increased 60 per cent at Rs 19 crore for FY01, the number of exclusive dealer outlets have also increased from 414 to 1,200.
To compete with players such as National, in early 2001, Carrier launched seven models of Toshiba RACs, three models of split ACs. Carrier envisages growing at 25 per cent for FY02 as against the 16 per cent industry growth. Despite fierce competition, Carrier’s dominant presence in the fast growing window AC segment bodes well for the company.
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