The Hindu Business Line : `Depressing times for washing machines'

IS the washing machine segment of the consumer durables industry loosing its fizz? This major sub-segment of the durables industry has been experiencing depressed market conditions for the last three years.

"There was a time when almost all the major players in the market were heavily advertising in the category, which is not visible now. The industry is upbeat about refrigerators and air-conditioners segments but no one is talking enthusiastically about washing machines," industry analysts said.

"Industry has not been showing much sign of growth worth the name during the last few years," Consumer Electronics and TV Manufacturers' Association (CETMA) official said. The total size of the washing machine market in India has been estimated at 1.3 million units per annum (in financial year 2002).

Commenting on the reasons for the depressed market conditions, CETMA official said that, "lack of infrastructure is one of the reasons for this. For example in Delhi, water and electric crisis is a major factor for the current market conditions." Apart from this, the cheap availability of domestic help in cities has also been cited as one of the reasons.

The washing machines demand is characterised by concentration in the urban areas, with the contribution in rural areas at only 10 per cent, analysts said adding that in urban areas, the market is skewed more towards the metros and other large cities.

On whether the year 2003 will show an improved market conditions, the industry analysts are `conservative in their prediction'.

According to a study conducted by ICRA on the Indian consumer durables industry, "the market for washing machines declined during financial year 2002 because of fast growth achieved in the previous years and economic slow down." The total domestic installed capacity of the organised sector (as of financial year 2002) is an estimated 3.63 million units per annum.

Further, compared with most other countries, the penetration levels of washing machines in the Indian market are quite low. Looking at the geographical distribution of the washing machine markets in India, the study reveals that, "geographically the market for washing machines is not distributed uniformly, with the bulk of demand coming from North and West, 41.5 per cent and 26.1 per cent respectively. While south accounts for 24.4 per cent of the total demand, the eastern region merely accounts for 8 per cent." An industry overview reveals that the organised washing machines industry consists of players of Indian origin as well as multinationals, the latter having craved out a sizeable market presence during the last few years, the study said.

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