BSH Home Appliances, a German home-appliance manufacturer, is set to ramp up production significantly starting in July. The company will be utilizing a second assembly line at its facility in Sriperumbudur, located near Chennai. According to executives at BSH Home Appliances India, the plant's capacity is expected to grow by 71% in the current year, reaching 620,000 units compared to 363,000 units in 2023.
Assembly Line Two will be utilized by BSH to manufacture their renowned 9-kg and 10-kg washing machines, which play a vital role in their production plan for the Indian market, especially with the rise of premiumization in the appliance and consumer durable sector.
The MD and CEO for India, at BSH Home Appliances, announced,"This summer, we have seen trends remain great especially in the cooling appliance category.We are seeing good growth potential in this market — 15 to 20% for BSH Home Appliances, and 25 to 30% growth in the premium appliance category."
The CTO and Chairman of the Board at BSH India, Rakesh Desai said,"We introduced a direct-cool single-door small refrigerator for the Indian market despite BSH typically not making such products.We have a 60% localisation at our plant now, and expect to be 70% localised next year."
BSH Home Appliances, a company based in Germany, has recently revealed its plans to invest ₹200 crore in setting up a second assembly line. This investment comes as a result of the growing demand for Siemens and Bosch washing machines, which are manufactured in India by BSH.
The South markets have proven to be the most lucrative for BSH, accounting for 48% of their total sales, closely followed by the Western region at 24%. Notably, the Chennai and Tamil Nadu market have experienced a significant increase in demand for high-end appliances.
It is not unexpected that the company is considering further investment in its India plant, particularly with the increase in demand during summertime and festive seasons. This decision comes as the company solidifies its commitment to making Sriperumbudur its primary manufacturing base in India for the foreseeable future.
Desai added,"We will be investing more as and when capacity demands, and the market grows."
The retail sector in 2024 is expected to experience a prosperous festive season, as projected by the company.
Saif added,"We expect to have growth over last year especially with premiumization picking up in rural markets quicker. Since the metropolitan markets boarded the premiumisation bus a while ago, we have been seeing bigger buying trends in rural markets as aspirations keep increasing."
BSH is investing in premiumization despite nationwide retailers experiencing a 3% sales growth in May 2024. A survey by RAI showed South India had the highest increase at 4%. CEO Kumar Rajagopalan stated that categories like food, grocery, and consumer durables are growing positively, and retailers are optimistic post-election.
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