Executive Summary-Household Appliances

Household appliances
Small towns and villages to drive CTV growth, albeit at lower realisations
Contents
Highlights
Sections
Early signs of revival in consumer
demand supported by excise duty cuts
of 4 per cent and 2 per cent in
December 2008 and February 2009,
respectively
CTV and AC volumes to grow rapidly in
Executive summary
Colour Television
Refrigerators
Washing machine
Air conditioners
Profitability outlook
Small towns and villages drive CTV growth
Annexures
1
3
5
7
9
11
12
16
CRISIL Researchs demand forecast method
13
2009-10; LCDs and FCTVs to drive CTV

growth; strong summer sales (AprilMay 2009) to lead to growth in AC
volumes
Household
Figures
appliance
margins
to
improve in 2009-10 on account of

declining raw material prices
Small towns and villages (population of
less than 1 lakh) to drive CTV growth;
refrigerators and washing machines to
be
Box
predominant
in
large
towns
(population of greater than 1 lakh)
CTV: Product mix

CTV - Value-wise market share (per cent)
Refrigerator: Product mix
REF- Value-wise Market share (Per cent)
Washing machine: Product mix
Washing Machine - Value-wise Market share (Per cent)
Air conditioner: Product mix
Air conditioners - Market share
Appliance-wise profitability
CTV: Volume distribution
CTV: Average realisations
Refrigerator: Volume distribution
Refrigerator: Average realisations
Washing machine: Volume distribution
Washing machine: Average realisations
3
4
6
6
7
8
10
10
11
14
14
14
14
15
15
Tables
Colour Television: A snapshot
Refrigerator
Washing machine- A snap shot
Air conditioner
Household penetration
Household Appliances: Industry size
Colour television: Sales volume
Colour television: Sales value
CTVs: Volume-wise Market share
Refrigerators: Sales volume
Refrigerators: Sales value
Refrigerator: Volume-wise market share
Washing machines: Sales volume
Washing machines: Sales value
Washing machine: Volume-wise market share
3
5
7
9
12
16
16
16
17
17
17
18
18
18
18
This document has been prepared by Sudip Mukherjee, Asmeen Shariff and Sridhar C (Head
June 2009
of Research). For any queries, please get in touch with our client servicing desk.
(clientservicing@crisil.com; Phone: 022-66913561)
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Executive summary
Durables demand shows signs of revival in the fourth quarter of 2008-09; overall growth to
be around 4 per cent in 2009-10
While the first half witnessed robust growth across products such as colour televisions (CTV), refrigerators and
washing machines, consumer sentiment weakened from the third quarter impacted by the global economic
slowdown. Festive sales during Diwali in 2008-09 were lower year-on-year (y-o-y), resulting in a decline in
volumes for CTVs and refrigerators. Third quarter CTV and refrigerator volumes declined by 9.4 per cent and 2.5
per cent, respectively. Air conditioner volumes also declined 10 per cent y-o-y in November 2008. Consumer
demand showed signs of revival with CTV volumes growing marginally (around 2 per cent y-o-y) in the fourth
quarter of 2008-09. Benefits of the excise duty cuts of 4 per cent and 2 per cent announced in the fiscal stimulus
packages in December 2008 and February 2009, respectively were partly passed on to consumers by
manufacturers, thereby contributing to the revival in demand. CRISIL Research expects the household appliances
industry to register moderate growth of 4 per cent in 2009-10. While demand growth in refrigerators and washing
machines is expected to remain at 3 per cent in 2009-10, CTV volumes are expected to exhibit a higher growth at
5 per cent led by LCD and FCTV sales. Air conditioner sales had declined in the third quarter of 2008-09,
however they have revived on account of strong sales in summer. Thus we anticipate air conditioner volumes to
grow by 5 per cent in 2009-10, primarily led by growth in Split AC sales. In 2010-11, we expect the industry to
grow by around 9 per cent with CTVs registering a growth of around 11 per cent.
Profitability to improve as prices of raw materials decline

The profitability of household appliance manufacturers is likely to improve over the next 1 year. We expect raw
material prices of copper, aluminum, steel and plastics to decline in 2009-10, resulting in an improvement in
operating margins by around 220-300 basis points (bps) across appliances like refrigerators, washing machines
and ACs. Colour picture tubes (CPT), accounting for a significant part of input costs for CTVs are likely to
remain at their current levels due to the levying of anti-dumping duty on picture tubes from Indonesia in March
2009, combined with the continued impact of higher import costs after anti-dumping duty was earlier levied on
CPT imports from China, Thailand, Malayasia and Korea in July 2008. These countries together account for
almost 90 per cent of CPT imports. However, the input prices of other raw materials such as plastics are
anticipated to decline resulting in a marginal improvement in CTV margins by around 60-100 bps.
Small towns and villages will drive CTV growth, albeit at lower realisations as consumers
are price sensitive
We have observed that small towns and villages (with a population of less than 1 lakh) contribute significantly
towards CTV sales. CTVs, being higher up in the consumer asset preference hierarchy as compared to
refrigerators and washing machines, enjoy higher penetration levels. With high CTV penetrations (of 63 per cent)
in larger towns (with a population of more than 1 lakh) manufacturers will have to look towards smaller towns to
drive volume growth. The challenge here is that the market comprising of smaller towns is more dispersed and
therefore the players will have to employ a more extensive distribution network to establish presence.
Nevertheless, the number of households that can purchase CTVs in smaller towns and villages is fairly large. For
instance, of all the households falling in the 1.2 lakh to 2.6 lakh income bracket, across India, approximately 47
per cent are under the rural category.
CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES
Therefore, CTV demand will largely stem from the small towns and villages (with a population of less than 1
lakh) comprising 52 per cent of the total volumes in 2012. However, players focussing on the CTV market in
smaller towns and villages may have to make-do with lower realisations as consumers here are more price
sensitive.
Products like refrigerators and washing machines still have relatively lower penetration levels in larger towns, (47
per cent and 18 per cent respectively) offering scope for further expansion. Further, the lifestyle of small towns
and villages coupled with problems such as sporadic power supply hinder the growth of appliances such as
refrigerators and washing machines. Thus, manufacturers will continue to focus on larger cities to drive sales of
refrigerators and washing machines. We expect these markets to contribute towards 68 per cent and 78 per cent of
the demand for refrigerators and washing machines, respectively in 2012.
Colour Television
CTV Industry review and outlook
The CTV industry was valued at around Rs 110 billion in 2008-09. Its share in the total value of the household
appliances industry is expected to remain stable at 48 per cent in 2009-10. CTV volumes increased by 17 per cent
in 2008-09 (y-o-y). While volumes grew by 54 per cent y-o-y in the first half of 2008-09, they declined by 5 per
cent in the second half. The poor performance in the second half can be attributed to a degrowth in the third
quarter. The third quarter (being festive season) sales for CTV industry accounting for 30-35 per cent of total
sales recorded degrowth of around 9 per cent y-o-y in 2008-09. Since then, demand has picked up during the
fourth quarter partly aided by the excise duty cuts of 4 per cent and 2 per cent announced in the fiscal stimulus
packages in December 2008 and February 2009, respectively.
Table 1: Colour Television: A snapshot
CTV
2007-08
2008-09
2009-10 P
2010-11 P
Volume growth
17
11
Change in realisation
-2
-2
-1
-15
-14
-13
-12
15
11
11
11
15
10
- Change due to prices

- Change due to segmental mix
Value growth
P: Projected
Source: CRISIL Research
Sales value growth for the year 2008-09 has lagged behind volume growth due to a decline average realizations.
High-end TVs (mainly LCDs) geared for take-off

Figure 1: CTV: Product mix
Segmental mix
67
16
27
2010-11 P
65
10
2009-10 P
6
67
65
14
54
32
14
54
32
31
2007-08
39
49
27
2008-09
12
25
59
18
19
62
39
2006-07
CCTV
FCTV
25
62
13
High-end
Source: CRISIL Research, Industry
High-end TVs are expected to contribute around 32 per cent of total CTV sales in 2009-10. Over the past few
years, a shifting of preferences towards liquid crystal display (LCD) has been observed, which is expected to
become more pronounced going forward as buyers are increasingly opt for high-end TVs [includes LCD, plasma
and rear projection televisions (RPTV)]. Reduced focus on the conventional colour TV (CCTV) segment, price
reductions in LCDs and declining price difference between flat colour televisions (FCTV) and high-end TV
segments are propelling this shift. In 2005-06, LCDs were, on an average, priced eight times higher than FCTVs,
which has now come down to a mere four times.
In 2009-10, FCTV growth is expected to moderate to around 3 per cent, whereas CCTV volumes are expected to
decline owing to the overall economic slowdown. We expect a shift in consumer preferences from CCTV to
FCTV on account of a narrowing price differential between them. Thus, FCTV is expected to constitute around 54
per cent of the total CTV market in 2009-10. High-end television, fuelled primarily by LCD TV sales, is expected
to constitute around 39 per cent of total CTV sales by 2010-11.
Market share: Review

Figure 2: CTV - Value-wise market share (per cent)
29
25
25
24
21
18
LG
Samsung
Onida
2007-08
16
18
Sony
Videocon*
Others
2008-09
In 2008-09, while most major companies maintained their prevailing market share, Samsung gained market share
by nearly 300 bps. This gain in market share is attributable chiefly to the increase in sales of the LCD segment,
where Samsung is the market leader and hence was the major beneficiary.
Refrigerators
Refrigerators Industry review and outlook
The refrigerator industry was valued at around Rs 51 billion in 2008-09 and constitutes around 20 per cent of the
total value of the household appliances industry. Refrigerator volumes grew by around 4 per cent y-o-y in 200809. The first half of 2008-09 saw volumes increasing by 10 per cent y-o-y while the second half saw volumes
decline by 3 per cent. Weakening consumer sentiment in view of the global economic slowdown was primarily
responsible for a decline in refrigerator volumes.
Industry volumes to grow by 2 to 4 per cent, realisations to improve marginally in 2009-10

While volumes declined in the second half of 2008-09, the summer season (April-May) saw volumes picking up.
In 2009-10, the refrigerator segment is expected to register a growth of around 3 per cent in volume terms, with
the direct cool segment growing at 1 per cent and frost free growing at 6 per cent. Whereas in value terms, the
industry is expected to grow by around 4 per cent, with direct cool growing by 3 per cent and frost free growing
by 5 per cent.
Table 2: Refrigerator
Refrigerator
Volume growth
2007-08
2008-09
2009-10 P
2010-11 P
11
- Change in realisation

Value growth
18
P: Projected
Realisations are expected to improve marginally due to higher sales of star rated products. Star rated products
consume less power and hence command a premium in pricing. Segmental mix is expected to improve in favour
of the frost free segment, thereby supplementing value growth. The shift in segmental mix is mainly attributable
to the reducing price differential and changing consumer preferences.
Product mix to shift in favour of frost free refrigerators

Figure 3: Refrigerator: Product mix
Segmental mix
67
33
2010-11 P
68
47
53
46
54
45
55
45
55
43
57
32
2009-10 P
69
31
2008-09
69
31
2007-08
72
28
2006-07
Frost free
Direct cool

In 2008-09, most major companies more or less maintained their market share. However, Godrej gained market
share by nearly 200 bps, attributable to the increasing sales of frost free refrigerators and the introduction of new
models; while Whirlpool (India) lost market share by around 200 bps.
Figure 4: Refrigerator - Value-wise market share (per cent)
26
25
24
18
19
16
22
18
13
12
LG
Samsung
Godrej
2007-08
Videocon *
Whirlpool
Others
2008-09
* Videocon includes Electrolux

Washing machine
Washing machine Industry review and outlook
The washing machine industry was valued at around Rs 21 billion in 2008-09, and constitutes around 9 per cent of
the total value of the household appliances industry. In 2008-09, washing machine volumes grew by around 5 per
cent (y-o-y). While volumes grew by around 12 per cent y-o-y in the first half, they declined by around 2 per cent
in the second half of the year as a result of weakening consumer demand.
Volumes to increase by 2-4 per cent in 2009-10

The washing machine segment is expected to register a volume growth of around 2-4 per cent in 2009-10, with the
semi-automatic segment growing at approximately 1 per cent and the fully automatic segment growing by around
5 per cent.
Table 3: Washing machine- A snap shot
Washing machine
2007-08
2008-09
2009-10 P
2010-11 P
Volume growth
13
- Change in unit realisation
20
Value growth
P: Projected
Realisations are expected to improve marginally in 2009-10 on account of an excepted shift in segmental mix
towards fully automatic washing machines. While the fully automatic segment constitutes only around 35 per cent
of the total washing machine industry in volume terms, it constitutes more than half the industry in value terms
owing to higher realisations. We expect this trend to continue going forward, with the contribution of the fully
automatic washing machine segment increasing consistently.
Gradual shift in product mix towards fully automatic machines

Figure 5: Washing machine: Product mix
Segmental mix
36
64
36
64
35
65
33
67
30
2010-11 P
45
55
2009-10 P
45
55
2008-09
46
54
2007-08
48
52
70
2006-07
Semi automatic
53
47
Fully automatic

Figure 6: Washing Machine - Value-wise Market share (Per cent)
27
25
16
17
16
10
16
16
11
10
5
LG
Samsung
15
IFB
Videocon *
2007-08
12
Godrej
Whirlpool
Others
2008-09
The washing machine industry is highly concentrated with the top 4 players occupying almost 70 per cent of the
market share. LG India, though still the market leader, lost market share by around 200 bps. On the other hand,
Samsung gained market share by 100 bps, supported by relatively higher realisations in the fully automatic
category.
Air conditioners
Air conditioners Industry review and outlook
The air conditioner industry was valued at around Rs 47 billion in 2008-09 and constitutes almost 22 per cent of
the total value of the household appliances industry. In 2008-09, air conditioner volumes grew by around 10 per
cent.
Table 4: Air conditioner
Airconditioners
2007-08
2008-09
2009-10 P
2010-11 P
Volume growth
25
10
10
- Split AC
50
17
15
- Window AC
Value growth
27
11
11
- Split AC
44
16
14
- Window AC
P: Projected
In 2008-09 the split air conditioner (SAC) segment grew by around 16 per cent, as against the window air
conditioner (WAC) segment, which grew by 3 per cent. The industrys value growth at 11 per cent has been
greater than its volume growth on account of a gradual shift towards the split air conditioner segment, thereby
improving industrys realisations.
We expect the air conditioner industry to grow by 4-6 per cent in 2009-10. Value growth is expected to be higher
than volume growth on account of an increased shift towards SACs coupled with higher realisations from star
rated models.
Even though air conditioner sales declined in November 2008, sales picked up in the fourth quarter of 2008-09.
Based upon the decline in sales in November and inventory build up seen in the third quarter, we projected a
decline in air conditioner volumes in our previous update. However, volumes grew by around 6 per cent in the
fourth quarter of 2008-09, with the growth momentum continuing through summer (April-May). Against this
backdrop, we have revised our outlook on air conditioners upwards for 2009-10.
Steady shift towards the split the air conditioner segment continues
There has been a gradual shift towards the split air conditioner segment, due to steady erosion of the price
differential between the two segments of air conditioners. This has encouraged not only the up-graders, but also
the first-timer users to opt for entry level SACs over WACs.
Figure 7: Air conditioner: Product mix

Segmental mix
43
57
2010-11 P
46
54
47
53
2009-10 P
2008-09
51
67
33
68
32
66
34
49
63
2007-08
59
37
41
2006-07
56
Split ACs
44
Window ACs

Figure 8: Air conditioners - Market share
35%
30%
33
27
24
25%
20
20%
15
15%
17
14
15
10%
6
4
5%
0%
LG
Voltas
Samsung
Videocon
2007-08
MIRC
Whirlpool
Others
2008-09
10
Profitability outlook
CRISIL Research expects the profitability of household appliance manufacturers to improve in 2009-10. A
decline in raw material prices is expected to greatly benefit manufacturers since they typically account for around
70 per cent of the total input cost. Realisations for the refrigerator and washing machine segments are likely to see
a marginal improvement, whereas those of CTVs are expected to decline slightly.
We expect raw material prices of copper, aluminum, steel and plastics to decline in 2009-10, resulting in an
improvement in operating margins by around 220-300 bps across appliances like refrigerators, washing machines
and ACs. CPT, accounting for a significant part of input costs for CTVs are likely to remain at their current levels
due to the levying of anti-dumping duty on picture tubes from Indonesia in March 2009, combined with the
continued impact of higher import costs after anti-dumping duty was earlier levied on CPT imports from China,
Thailand, Malayasia and Korea in July 2008. These countries together account for almost 90 per cent of the total
CPT imports. However, the input prices of other raw materials such as plastics are anticipated to decline resulting
in a marginal improvement in CTV margins by around 60-100 bps.
Figure 9: Appliance-wise profitability
Operating margins (%)
8.0
7.0
6.0
5.0
4.0
3.0
2.0
2006-07
2007-08
AC
2008-09
WM
CTV
2009-10 P
Ref
11
Small towns and villages drive CTV growth

In this report we have attempted to analyse the contribution of small towns and villages (with a population of less
than 1 lakh) towards the demand for CTVs, refrigerators and washing machines. Further, the larger cities (with a
population of over 1 lakh) have been segmented based upon their population into the following categories:
Population between 1 to 10 lakh

Population between 10 to 40 lakh
Population greater than 40 lakh
We observed that small towns and villages tend to have a larger contribution towards the demand for CTVs vis-vis that for refrigerators and washing machines. CTVs, being higher up on the consumer asset preference
hierarchy as compared to refrigerators and washing machines, enjoy higher penetration levels. Further, the
lifestyle of small towns and villages coupled with problems such as sporadic power supply hinder the growth of
appliances such as refrigerators and washing machines. The penetration levels enjoyed by CTVs, refrigerators and
washing machines are as below:
Table 5: Household penetration
(Per 100 households)
CTV
Pop > 1 lakh
Refrigerator
Pop < 1 lakh
Washing machine
Pop > 1 lakh Pop < 1 lakh
Pop > 1 lakh Pop < 1 lakh
2004-05
49
12
41
13
2005-06
53
13
42
14
2006-07
58
14
44
15
2007-08
59
17
45
17
2008-09
63
19
47
18
In case of refrigerators and washing machines, larger cities still offer a substantial scope for growth given the
relatively lower penetration levels. On the other hand, CTV manufacturers will have to fine tune their focus on
smaller towns in order to drive volume growth. However the market comprising of smaller towns is widely
dispersed and therefore will require a more extensive distribution network on the part of the manufacturer.
Nevertheless, the number of households that can purchase CTVs in smaller towns and villages is significant. For
instance, of all the households falling in the 1.2 lakh to 2.6 lakh income bracket, across India, approximately 47
per cent are under the rural category.
CTV demand is expected to stem largely from small towns and villages (with a population of less than 1 lakh).
These markets are expected to constitute 52 per cent of the CTV volumes in 2012. Moreover, players
concentrating on the CTV market in smaller towns and villages may have to make-do with lower realisations,
since consumers in these markets are highly price sensitive. Conversely, large cities (with a population of over 1
lakh) will continue to dominate the demand for refrigerators and washing machines. In 2012, we anticipate large
cities to constitute 68 per cent and 78 per cent of the demand for refrigerators and washing machines, respectively.
12
Box 1: CRISIL Researchs demand forecast method
In order to forecast domestic demand for household appliances, CRISIL Research has first estimated and
forecast the stock of each household appliance. The annual differences in the stock represent new demand
(including demand for upgrades), to which estimated units of replacement (life expired) are added to arrive at
forecast sales. Upgrade demand is assumed to add to the stock of appliances, since in India used durables are
purchased by lower income households and hence add to the stock. The stock also includes multiple units
owned by a small proportion of households. Stock demand has been forecast using income distribution and
penetration forecasts, based on historical data from NCAER surveys of income and ownership. CRISIL
Research has forecast income distribution based on economic growth assumptions. In order to project
penetrations, it has been assumed that any changes in asset preference hierarchy will primarily depend only
upon significant changes in relative-utility-to-cost-of-ownership. Since the price of an appliance is only one
component of cost of ownership (the other being recurring expenses), and perceived utility can change only
gradually with product changes and market evaluation, this has implied virtually no change in the asset
preference hierarchy over the 4-year projection period. It has further been observed that for a given income
category, the probability of purchase grows with time and the same has been extrapolated into the future.
Replacement demand has been estimated based on assumptions on the life of critical components and average
usage, based on interactions with industry sources. Upgrade demand has been projected based on current and
expected estimates of average years to upgrade.
CTVs Small towns and villages to drive demand

Entry level CTVs are available at far lower price points as compared to refrigerators and washing machines. Also,
a relatively lower cost of ownership of CTVs has placed it higher up in the asset preference hierarchy. Currently,
small towns and villages contribute towards 49 per cent of the demand for CTVs. By 2012, we expect these
markets to contribute to around 52 per cent of the total demand for CTVs. We expect the penetration of CTVs to
grow from around 19 per cent in 2008 to 29 per cent in 2012, as income levels rise and CTV prices decline. The
penetration of CTVs in cities with population greater than 1 lakh is expected to grow from the current 63 per cent
to 76 per cent in 2012. Consequently, volumes in small towns / villages and large cities are expected to grow at a
compound annual growth rate (CAGR) of 11.5 per cent and 8.5 per cent (during 2008 to 2012), respectively,
leading to an increase in CTV volumes at a CAGR of 10 per cent during 2008 to 2012. Consumers in small towns
and villages tend to be price consicious and hence realisations are generally lower in this market. Moreover,
branded players have to compete with local manufacturers in these markets, thus making competitive pricing
extremely important to garner market share.
Players with a larger focus on metros and cities with a population over 40 lakhs enjoy higher realisations with the
a larger presence of high-end TVs like LCDs and FCTVs in their product mix. Even though increased presence in
small towns and villages helps players drive volumes, it impacts the average realisations of players on account of
sales of entry level models at lower price points.
13
Figure 10: CTV: Volume distribution
Figure 11: CTV: Average realisations

(Rs / unit)
(Units in '000)
18000
13,000
4 year CAGR 10 %
16000
15%
12,000
14000
13%
11,000
12000
16%
10000
16%
14%
8000
6000
24%
16%
14%
23%
46%
47%
2006
2007
10,000
13%
9,000
21%
8,000
52%
4000
2000
20%
49%
7,000
6,000
5,000
0
2008
2006
2012 P
2007
2008
Population (<1lakh)
Population (1-10lakhs)
Population (<1lakh)
Population (40lakh+)
Population (40lakh+)
Refrigerators: Larger cities still to account for a major market

Direct cool refrigerators are more popular in small towns and villages than large citites. In these markets,
refrigerators are often purchased for their ice making capability. We anticipate the penetration of refrigerators in
small towns and villages to improve from 7 per cent in 2008 to around 8 per cent in 2012. On the other hand, in
larger cities, this number is expected to improve from 47 per cent in 2008 to 56 per cent 2012. Consequently, we
anticipate volumes in larger cities to grow at a CAGR of 8 per cent, during 2008 to 2012, while that in small
towns and villages are expected to grow at a CAGR of 12.8 per cent over the corresponding period. This will
result in refrigerator volumes growing at a CAGR of 9 per cent during 2008 to 2012. By 2012, smaller towns and
villages will account for around 32 per cent of the total refrigerator volumes.
Given the lower penetrations in small towns and villages, demand in these markets is likely to be driven by first
time buyers. Irregular power supply continues to be a hindrance to refrigerator demand growth in these markets.
In order to address this concern, manufacturers have responded by introducing models that do not require voltage
stabilizers. Realisations in small towns and villages tend to be lower as the product mix is skewed in favour of
direct cool refrigerators.
Figure 12: Refrigerator: Volume distribution
(Units in '000)
7000
Figure 13: Refrigerator: Average realisations

(Rs / unit)
13,000
4 year CAGR 9 %
6000
21 %
12,000
5000
4000
3000
2000
22%
21 %
32 %
1000
0
21 %
21 %
20 %
30 %
30%
25 %
27 %
28 %
2006
2007
2008
POP (<1Lakh)
POP (1-10Lakhs)
14
22 %
POP (10-40Lakhs)
19 %
28 %
11,000
10,000
9,000
32 %
8,000
2012 P
POP (40Lakh+)
2006
2007
2008
POP (<1Lakh)
POP (1-10Lakhs)
POP (10-40Lakhs)
POP (40Lakh+)
Washing machines: Larger cities to continue to lead

We expect the penetration of washing machines to continue to remain relatively low in small towns and villages.
The unavailability of continuous water supply and lower employment rate of women has hindered the reception of
washing machines in smaller towns and villages. Comparatively, semi-automatic machines find more favour in
these markets. Currently, the penetration of washing machines in small towns and villages stands at a meagre 2
per cent, and is expected to improve to 3 per cent by 2012. This will result in volumes growing in small towns and
villages at a CAGR of 12.8 per cent during 2008 to 2012. In large cities (with a population of over 1 lakh),
penetration levels are expected to improve from 18 percent in 2008 to 23 per cent in 2012. Consequently,
volumes in large cities are expected to grow at a CAGR of 8 per cent during 2008 to 2012. Realisations for
washing machines in small towns and villages tend to be lower due to higher sales of semi-automatic models,
which cost less. Washing machines growth is likely to driven mostly by large cities. By 2012, smaller towns and
villages are expected to account for around 28 per cent of washing machine volumes.
Figure 14: Washing machine: Volume
Figure 15: Washing machine: Average
distribution
realisations
Units ('000 s)
(Rs / unit)
11,000
3200
4 year CAGR 9 %
2800
25 %
10,000
2400
2000
1600
1200
800
400
0
23 %
25 %
26 %
9,000
20 %
21 %
30 %
28 %
21 %
26 %
24 %
2006
2007
2008
20%
34%
POP (<1Lakh)
POP (1-10Lakhs)
20 %
POP (10-40Lakhs)
27%
8,000
28 %
7,000
2012P
POP (40Lakh+)
2006
2007
2008
POP (<1Lakh)
POP (1-10Lakhs)
POP (10-40Lakhs)
POP (40Lakh+)
15
Annexures
Table 6: Household Appliances: Industry size
Value (Rs billion)
2006-07
2007-08
2008-09
CTV
96
96
110
Refrigerators
41
48
51
Room Air conditioners
33
42
47
Washing machines
16
20
21
186
206
229
Household appliances
Table 7: Colour television: Sales volume

('000 units)
Player
LG
Samsung
Videocon Brands*
Sony
2007-08
2008-09
HighFCTV end TVs

1,863.2
79.3
CCTV
655.9
CCTV
672.7
Y-o-Y Growth
HighFCTV end TVs

2,251.5
177.9
CCTV
2.6
FCTV
20.8
High-end
TVs
124.4
0.0
1,460.5
142.7
0.0
1,897.4
280.4
29.9
96.5
848.2
1,436.6
37.5
837.7
1,516.9
61.4
-1.2
5.6
63.8
0.0
413.2
55.8
0.0
379.1
121.3
-8.2
117.2
Mirc **
447.5
746.2
8.9
411.6
857.3
16.4
-8.0
14.9
84.2
Philips
156.4
296.2
20.9
167.0
399.8
37.8
6.8
35.0
80.6
Others
1,129.0
531.1
12.2
1,245.1
776.2
34.8
10.3
46.1
184.6
Total
3,237.0
6,747.1
357.3
3,334.1
8,078.2
730.0
3.0
19.7
104.3
Notes
1) *Videocon includes Akai, Hyndai, Kenstar, Sansui and Videocon
2) **Mirc includes Igo & Onida
Table 8: Colour television: Sales value

(Rs billion)
Player
LG
2007-08
2008-09
High-end
CCTV FCTV
TVs
3.7 16.2
3.9
Y-o-y growth
High-end
CCTV FCTV
TVs
3.5 18.1
6.4
CCTV FCTV
-4.1 11.7
High-end
TVs
64.4
13.0
7.1
0.0
15.6
10.4
20.1
47.4
4.7
11.4
1.3
4.3
11.4
1.7
-8.5
-0.1
31.4
5.1
3.7
0.0
4.5
5.5
-12.0
50.0
Mirc**
2.6
6.2
0.5
2.2
6.4
0.6
-14.0
3.1
15.0
Philips
1.0
2.8
1.3
1.0
3.3
1.7
0.5
17.1
25.1
Others
5.7
4.8
0.9
6.0
5.9
1.7
4.9
22.4
89.7
17.7
59.6
18.7
17.1
65.2
28.0
-3.5
9.5
49.8
Samsung
Videocon brands*
Sony
Total
Notes

16
Table 9: CTVs: Volume-wise Market share

(Per cent)
2007-08
2008-09
LG
25.1
25.5
Samsung
15.5
17.9
Mirc **
11.6
10.6
Videocon *
22.5
19.9
Philips
4.6
5.0
Others
20.7
21.1
Grand Total
100
100
Notes
Table 10: Refrigerators: Sales volume

('000 units)
2007-08
2008-09
Y-o-y growth
Direct cool
3,049.3
3,132.2
2.7
<= 184 litres
1,943.9
1,815.8
-6.6
185 to 225 litres
838.8
1,009.4
20.3
>= 226 litres
266.6
307.0
15.2
Frost free
1,339.0
1,431.0
6.9
<= 225 litres
225.2
219.8
-2.4
226 to 270 litres
642.4
696.1
8.4
271 to 300 litres
174.4
188.5
8.1
301 to 350 litres
199.0
213.7
7.4
98.0
112.9
15.2
4,388.3
4,563.2
4.0
>= 351 litres

Total
Table 11: Refrigerators: Sales value

(Rs billion)
2007-08
2008-09
Direct cool
26.3
27.9
6.0
15.2
14.7
-3.3
<= 184 litres
Y-o-y growth
185 to 225 litres
7.9
9.5
21.2
>= 226 litres
3.3
3.7
12.9
Frost Free
21.8
23.2
6.3
<= 225 litres
2.8
2.6
-6.0
226 to 270 litres
8.7
9.4
8.5
271 to 300 litres
2.8
3.1
7.4
301 to 350 litres
3.9
4.2
5.6
3.5
3.9
10.9
48.1
51.1
6.2
>= 351 litres

Total
17
Table 12: Refrigerator: Volume-wise market share

(Per cent)
2007-08
2008-09
LG
25.1
24.6
Samsung
15.5
16.2
Videocon *
15.9
14.6
Godrej
17.5
18.7
Whirlpool
23.1
21.8
Others
2.9
4.2
Total
100
100
Note:
1) * Videocon includes Electrolux, Kelvinator, Akai and Kenstar
Table 13: Washing machines: Sales volume

(in 000 Units)
Fully automatic
Front loading
2007-08
2008-09
Y-o-y growth
708.1
773.9
9.3
221.6
259.0
16.9
Top loading
486.5
514.9
5.9
Semi-automatic
1,412.9
1,444.4
2.2
Single-tub washer & dryer

Twin-tub
Total
19.4
2.3
-88.2
1,393.6
1,442.1
3.5
2,121.0
2,218.3
4.6
Table 14: Washing machines: Sales value

(Rs. Billion)
Fully automatic
2007-08
2008-09
Y-o-y growth
10.3
11.2
8.7
Front Loading
4.5
5.1
13.2
Top Loading
5.8
6.1
5.1
Semi-automatic
9.4
9.6
2.9
Single-tub washer & dryer
0.1
0.0
-89.2
Twin-tub
9.3
9.6
3.6
19.7
20.8
5.9
Total
Table 15: Washing machine: Volume-wise market share

(Percent)
2007-08
2008-09
LG
25.6
22.7
Samsung
16.0
16.7
IFB
Videocon *
Godrej
4.8
5.5
19.7
19.6
6.4
6.5
Whirlpool
15.6
14.8
Others
11.9
14.4
Grand Total
100
100
Note:
1) * includes Videocon, Kelvinator, Kenstar & Electrolux
18
Mumbai
1061, Solitaire Corporate Park
Andheri-Ghatkopar Link Road,
Andheri (East), Mumbai 400 093.
Phone +91 (22) 6758 8035
FAX +91 (22) 6758 8088
Bengaluru
W-101, Sunrise Chambers,
22, Ulsoor Road,
Bengaluru 560 042.
Phone +91 (80) 4117 0622
FAX +91 (80) 2559 4801
New Delhi
The Mira, G-1, 1st Floor
Plot No. 1 & 2, Ishwar Nagar,
Near Okhla Crossing, New Delhi 110 065.
Phone +91 (11) 4250 5100, 2693 0117 - 121
FAX +91 (11) 2684 2212/13
Kolkata
Horizon, 4th floor,
57 Chowringhee Road,
Kolkata 700 071.
Phone +91 (33) 2283 0595
FAX +91 (33) 2283 0597
E-mail: research@crisil.com
www.crisil.com

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Household appliances

CRISIL Researchs demand forecast method

2009-10; LCDs and FCTVs to drive CTV

improve in 2009-10 on account of

(population of greater than 1 lakh)

CTV: Product mix

Industry Information Service

About CRISIL Limited

Profitability to improve as prices of raw materials decline

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

- Change due to prices

High-end TVs (mainly LCDs) geared for take-off

Source: CRISIL Research, Industry

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Market share: Review

Source: CRISIL Research, Industry

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Industry volumes to grow by 2 to 4 per cent, realisations to improve marginally in 2009-10

- Change due to prices

- Change due to segmental mix

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Product mix to shift in favour of frost free refrigerators

Source: CRISIL Research, Industry

Market share: Review

* Videocon includes Electrolux

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Volumes to increase by 2-4 per cent in 2009-10

- Change in unit realisation

- Change due to prices

- Change due to segmental mix

Gradual shift in product mix towards fully automatic machines

Source: CRISIL Research, Industry

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Market share: Review

Source: CRISIL Research, Industry

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Figure 7: Air conditioner: Product mix

Source: CRISIL Research, Industry

Market share: Review

Source: CRISIL Research, Industry

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Source: CRISIL Research

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Small towns and villages drive CTV growth

Population between 1 to 10 lakh

Pop > 1 lakh Pop < 1 lakh

Pop > 1 lakh Pop < 1 lakh

Source: CRISIL Research

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Box 1: CRISIL Researchs demand forecast method

CTVs Small towns and villages to drive demand

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Figure 10: CTV: Volume distribution

Figure 11: CTV: Average realisations

Source: CRISIL Research

Source: CRISIL Research

Refrigerators: Larger cities still to account for a major market

Figure 13: Refrigerator: Average realisations

Source: CRISIL Research

Source: CRISIL Research

CRISIL RESEARCH HOUSHOLD APPLIANCES UPDATE: JUNE 2009, 18 PAGES

Washing machines: Larger cities to continue to lead