BSH Household Appliances, Europe’s leading home appliance maker selling the Bosch and Siemens brands, is going to invest around Rs 600 crore for manufacturing in the country to roll out India specific products some of which will be global first for the company and reduce dependence on China, India managing director Neeraj Bahl said.
This is after the company reported its best ever sales and profit in India in 2020 despite the lockdown due to massive surge in demand led by change in consumption habits. BSH India grew sales by over 8% at Rs 1500 crore in 2020 while profit improved 7% over what it reported in 2019, said Bahl.
He said the company intends to start manufacturing of volume products like refrigerator, top-load washing machine, dishwashers, cooktops and hoods, and split AC in the country over the next two years. All these products will be developed in India too.
“We are investing Rs 300 crore for manufacturing of frost-free refrigerator and cooktop, and another Rs 300 crore is in the pipeline for single door refrigerator and other products,” said Bahl.
BSH India has also shifted the production of top loading washing machines from China to a contract manufacturer in the country which will reduce its dependence on China to less than 2% of its business. “Even 65% of the components used for our products made in the country are sourced locally which will grow to 75% by the year-end,” said Bahl.
Bahl said the Indianisation of product portfolio and manufacturing is part of BSH’s strategy to grow sales to Rs 5,000 crore by 2025. He said the made-in-India frost-free refrigerators will hit the market by October, while top load washing machines by December. At present, BSH makes front load washing machines in India.
“BSH entry into volume products is due to the fact that over 50% of the Indian market is dominated by such products like single door refrigerator or semi-automatic washing machine. However, we will remain premium in that space as well,” he said.
The company said its built-in appliances business was impacted last year due to slowdown in real estate market otherwise the growth in revenue and profit would have been much more. BSH India also operates five company-owned exclusive stores set up through the retail foreign direct investment route.