Masaru Tamagawa, Managing Director, Sony India, believes that higher duty structures on imports and the depreciating rupee are coming in way of making Sony products in India more affordable.
He speaks to Business Standard about his plans for the Indian market.
Sony aims to double the revenues from the BRIC countries (Brazil, Russia, India and China) to two trillion yen (about $18.6 billion) in the next three years. What will be India's contribution to the target?
For Sony Corp, the biggest markets - USA, Europe and Japan -- have become saturated. The company is now focussing on BRIC nations as these markets are growing at fast pace.
I think our group companies in India (Sony India, Sony Ericsson Mobile Communications and Sony BMG Music Entertainment) will together contribute around 15- 20 per cent to the total revenue. Sony Ericsson phones, Brava LCDs and Vaio laptops will be the major contributors to this number.
How is inflation impacting your sales?
We haven't seen any negative impact on the sales, so far. However, spiralling crude oil prices has fuelled a rise in input costs globally. In India, the depreciating rupee has been the primary concern.
In the past three months, the currency has depreciated by almost by eight per cent leading to an additional pressure on our cost of import as our landed costs have gone up.
As of now, we have been able to absorb the costs and not pass it on to consumers. But if the conditions remain, we may evaluate a possible price hike, which we have never done in the past.
What is your target for the domestic front this year? How will you achieve this target?
This year we hope to achieve a turnover of Rs 4,000 crore (Rs 40 billion) as against Rs 3,000 crore (Rs 30 billion) last year. Bravia LCDs, Vaio laptops and cyber shot cameras are our growth engines and we will continue to introduce new models in these categories.
We also plan to bring in new product ranges across our digital imaging segment and mp3 category. We wish to cultivate the demand for HD in the country by introducing more HD products.
We also plan to introduce more aspirational products in the future like our OLED (Organic Light Emitting Diode) television. The focus will also be to strengthen our dealer network.
How important is the rural market for Sony?
Rural markets are surprisingly opening up to products like LCDs. We now have people picking up our Bravia LCDs, especially the 32 inch and 26 inch models. At present, 20 per cent of our sales come from the rural market and we see the number growing in the future.
Sony has been aggressively marketing the Bravia LCD range. Will you continue to push it in FY09 as well?
This year we will spend Rs 60 crore (Rs 600 million) for advertising and marketing Bravia in the country. Last year, we spent half the amount, about Rs 30 crore (Rs 300 million).
The Indian LCD market is likely to grow to 3 million units by 2010 from 1 million units this year. There is ample scope for us to expand. We hope to sell about 300,000 units of LCD television this year and take our current market share of 25 per cent to 30 per cent in the next two years.
We have already introduced new models under the Bravia range and plan to take the total to 10 this year.