After television, Samsung now starts importing air conditioners

KOLKATA: Samsung India started importing air conditioners from Vietnam through the free trade agreement (FTA) as it became cheaper after the recent increase in customs duties on AC compressors, two industry executives said .

The Korean electronics company, which saw its market share in AC shrink significantly from FY16, began importing its premium Wind-Free product range. The two executives expect to increase imports to other AC models and use the AC production facility at their Chennai plant for other products, as the import tariff increase on compressors to 10% from 7.5% it made cheaper imports of complete AC on the basis of FTA.

"However, not all brands would benefit from such imports as Samsung since they do not have a manufacturing base in ASEAN ASEAN nations," one of the executives said. With this, AC becomes the second product Samsung began to import into India after television, in which case also the import of components is more expensive.

Samsung also planned to curb the production of mobile phones, including flagship models Galaxy S9 and Note 9, unless the government had delayed a Make in India plan for smartphone components such as displays and touch panels. The Center has finally postponed the plan to next year.

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Samsung India's share of the airconditioner market fell to 5% in the period April-December 2018 from a peak of 13.7% in FY16, as per GfK. At one point he was the second AC producer in India. Like GfK, Tataowned Voltas is now the largest brand on the market with a 22.8% share during April-December, followed by LG India at 17.7%.

An industry executive said that Samsung lost the leadership game after leaving the AC segment with low-priced windows, which accounts for a third of the market and the entry of low-priced brands, including some operating only in the online space.

Also in the divided AC segment, Samsung is following the sales of Voltas, LG, Lloyd, Daikin, Hitachi and Blue Star with a market share of 5.7% during the nine months ended in December, as per GfK.

An industry executive aware of Samsung's plans stated that the company aims to grow faster than the market this year to recover some lost ground and will launch a new line of AC with "technology triple inverter ". He also said that the import from Vietnam is a marginal amount compared to what Samsung sells in India.

An e-mail sent to Samsung India did not raise any response at the time of Sunday's press.

The government doubled the customs duty on the ACs by up to 20% in September, while also doing commuters on the compressors.

The industry depends largely on imported compressors, which account for 60-65% of the production value of an AC, since the internal capacity does not even cover 30% of total sales.

Meanwhile, the Chinese electrical component manufacturer Haier Group is expanding its compressor unit in Gujarat, while the Guangdong Meizhi Compressor is installing a new compression plant, industry executives said.

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