Slowdown a challenge, but India looks promising in long term: Whirlpool chief

NEW DELHI: Slowdown in the Indian economy poses challenges for consumer durable companies, though long-term fundamentals of the market appear healthy and promising, Marc Bitzer, global CEO of the $21-billion American consumer durables giant Whirlpool, has said. The company, which has more than 25-year-long presence in India and is now scaling up exports, also said “structural changes” such as demonetisation and GST had led to some “teething troubles” for the economy and resulted in creating a “brief period of uncertainty”.

However, efforts towards improving the ease of doing business, and a reduction in tax rates on consumer durables in GST regime (18% against 28% earlier), had helped grow demand. “India is one of the fastest growing economies in the world with a huge and untapped consumer durables market,” Bitzer told TOI as the company started production from a new refrigerator line at its Pune facility.

Whirlpool sells refrigerators, washing machines, microwave ovens and air-conditioners in India, and has three manufacturing units here — at Pune, Puducherry and Faridabad — where it makes 90% of its products. It has made an investment of Rs 450 crore in India over the past three years, and some of this is also for increasing production as it increases shipments of the India-made products to markets in SAARC region, Southeast Asia, Middle East, Africa and Australia.

Asked about competition from Korean brands, apart from increasing threat from Chinese companies, Bitzer said Whirlpool’s long presence in India and “deep local insights” has helped the company understand market dynamics better.

Asked whether trade tensions between China and the US could see flow of investments getting stronger in India, he said the market here has its own strong traction. “When we make decisions about manufacturing locations, we take a long-term perspective of decades. Tariffs and trade tensions are not a key criteria in these decisions because they tend to be of a much shorter nature. What matters is our long-term perspective on health of the marketplace and structural competitiveness of manufacturing, and in this regard India scores very high.”