New Delhi: Consumer electronics firm Salora International Ltd will exit television manufacturing and will outsource production to a third party.
Gopal Jiwarajaka, managing director of Salora, said the outsourced television sets are expected to hit the market in March and the company will launch a repositioning campaign around that time.
He said the company was in the process of finalizing a manufacturing deal with two Uttaranchal-based companies he declined to name. “We are not exiting the category, but outsourcing the manufacture of television sets as it is more cost effective,” he said.
Jiwrajka said Salora’s brand image took a beating as the company focused more on its joint venture with Japan’s Panasonic that ended in 2008.
Currently, the television business contributes approximately 10% to Salora’s total revenue of Rs700 crores, said Jiwarajka. The company has interests in sourcing and procurement, manufacture, distribution and marketing of products in the consumer electronics, telecom and IT space.
Salora claims it has about 1% share of the market in the television segment. The company sold around 100,000 units in 2010-11, mostly in the rural markets of Uttar Pradesh and Bihar, according to the company.
By March, 2011, the company will also shut down its consumer electronic retail store chain called Terminal. The retail business launched in 2008 in Delhi was being shelved owing to “poor performance,” said Jiwarajaka.
On Wednesday, Salora announced a tie up with electric kitchen appliances manufacturer Osaka-based Zojirushi Corp. for marketing and distribution of the Japanese company’s thermo-ware range. The product was launched today and will hit the market next week.