Phased Manufacturing Programme can be a game changer for both India and Japan: KJ Jawa, Daikin India

In an exclusive conversation with BW HOTELIER, Kanwal Jeet Jawa, MD & CEO of Daikin Airconditioning India Pvt. Ltd. & Member of the Board (Non-Resident) & Regional General Manager, Air Conditioning Business, India & East Africa Daikin Industries Ltd, Japan, sheds light on the impact of pandemic on current consumer durables sector. He also talks about the ‘need of the hour’ i.e. Indian manufactured products.

The pandemic has added to the woes of an already sluggish economy. 2019 was a good year for the consumer durables sector however, 2020 hasn’t been all that great and now Covid-19 has struck. How do you see this gradual unlocking impacting the consumer and AC segment?

Yes, the year FY19 was a good year for Daikin India, but towards the end, we had to face challenges owing to COVID 19 situation. The ongoing restrictions are imperative to controlling the spread of this pandemic, so as a responsible global corporate citizen, we are in agreement with the various state & central government departments. The AC industry, like many others, is also impacted in terms of – demand fulfillment, manufacturing and after-sales service leading to a 20 -25 percent sales drop during the lockdown.

But with the late summer & pent up demand, we are witnessing consumers returning to buy ACs. With gradually opening of the economy & normalcy, many small & medium businesses are now in need of Air-conditioning like before, hinting towards a steady growth. Air-conditioning products are at the base of our everyday life and linked to productivity, so with the India long term potential in place, I expect the normal growth to return by the last quarter of FY20. 

As more and more consumers safely start stepping out, there will be a rise in the consumer spends across products and services that have now become essential for the discerning Indian consumers.

Your views on the new ‘Make in India’ push announced by the Prime Minister of India?

The Hon’ble Prime Minister of India Shri. Narendra Modi announced – ‘Getting Growth Back’ and assured India Inc. that growth in the economy will return soon as the government continues to pursue multiple reforms. I agree that the need of the hour is that more and more products are ‘Made in India’, which are ‘Made for the world’ focussing towards balancing imports. The same was iterated by our Prime Minister as well. 

We welcome these bold & pro-active steps from the PM with a view to boost the Indian manufacturing capabilities and support the economy with more jobs, consumption & trade. Daikin India had shared its intent on the local value addition through CII, RAMA and FICCI, & various government departments during the past few months. But the measurable success of these steps rests in the policy reworking & speed of execution, if India has to capitalise and convert these opportunities into any actionable outcomes. Considering China produces more than 100mn ACs per year, the Indian market of 6.5mn units bears a great potential if a comprehensive plan can be implemented to support local manufacturing & grow the market.

Daikin is ready to take the advantage of the – Phased Manufacturing Programme (PMP) and remain committed to invest in the third manufacturing unit to augment local production capacity. Considering many Japanese manufacturers are waiting with investments plans to move out of China, this PMP can be a game changer for both India and Japan.

What is the outlook for the upcoming months? What does the summer look like in terms of sales?

The coming months, with unlocking gaining momentum, we are now prepared at – Sales, Service, distribution & manufacturing departments to help customer serve better and gain their confidence.  What remains paramount for Daikin is to reach out to our customers & serve them and for the same we are working on multiple options for cementing distribution and after sales services. As the new normal spreads itself, we can get a clearer picture on the steady rate of sales velocity, but as of now we are getting better day by day. To support sales, we are offering various product bundled schemes & finance options to help consumers.

How is your organization fulfilling its responsibilities towards employees and customers during this challenging time?

Daikin India had adopted an effective way to minimise risk of the virus’s transmission by reducing density and strictly maximising social distancing. Extensive, deep cleaning was undertaken at all our sites. In all our offices, we have been observing new health screenings and temperature checks. As rates of new infections continue to grow in other places, we’re taking additional steps to protect our team members and customers. 

We know our customers depend on Daikin products all the time, and especially in times like these. We’re bringing the same creativity and passion to meeting this challenge that we do in everything else we undertake. Regular client online meetings and discussion are undertaken, where customer apprehensions are addressed & resolved.  We are committed to providing exceptional service to our customers remotely in the best possible manner.