Make in India: Bosch and Siemens household appliances to pump in Rs 650 crore

MUMBAI:Bosch and Siemens Household Appliances plans to invest about Rs 650 crore in India to expand its factory, add an innovation centre, open own stores and launch many of its global products in a market where Europe’s largest home appliances maker wants to figure among the top three players in the next decade.

"India is at the core of our emerging market strategy and the place to be in, in the next decade. We want to grow our market share from 1% to around 10% and have the No. 3 position in a decade,"said Karsten Ottenberg, chairman and CEO of Germany-based BSH Hausgeräte.

The company, which opened its first store in India two years ago, plans to have about 200 branded stores in the next 3-5 years from 30 stores at present. The size of the Indian consumer electronics and home appliances market is estimated at around Rs 40,000 crore.

Emerging markets contribute about 25% to the company's revenues and the share is gradually increasing, especially at a time when some of its key European markets are showing signs of stagnation. However, India currently accounts for less than 1% of its annual sales of over ¤11 billion. The firm wants to compensate for its late-mover disadvantage by flooding retail shelves with global products as well as brands developed locally.

"We will develop our product portfolio in India and launch most of our categories, from washing, cooking and cooling to even dishwashing.

Some products, like a three-gas burner used to make roti is an example of both technology and Indian customisation as nobody needs that elsewhere,"said Ottenberg, who was in India on a four-day visit to check the progress of the company's new plant in Chennai as well as review business plans with key customers.

The company faces strong competition from global rivals Samsung, Whirlpool and LG. While most of its competitors have been making efforts to reach more than a billion Indians through affordable products, BSH hopes to capture the growing ranks of middle-class customers by luring them to scale up with its aspirational products. As a result, Bosch is 10-20% pricier than industry average while the retail prices are 25-50% higher for Siemens products.

BSH, unlike most global consumer firms, wants to have an autonomous policy where most product development is done in India. "While most products are imported right now, majority of our products sold here will be made in India in the next 3-5 years,"said Ottenberg. The company's target audience, which comprises the 60 million urban middle-class, is on the rise too, and is expected to increase to 200 million by the end of this decade.