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Lixil Expands Indian Presence, Targets $208M in Building Material Sales by 2033

Amidst competition and challenging global markets, Lixil intensifies its focus on India, planning a significant sales network expansion and local production
Japan
l 5938.TSE Mid and Small Cap 2000
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Japanese housing equipment manufacturer Lixil is making a decisive push into the Indian market, aiming to increase its regional revenue from building materials to about 30 billion yen ($208 million) by fiscal 2033. This ambitious move involves expanding its sales agent network in India to approximately 200 by fiscal 2024, a significant jump from the current 95.

Lixil’s strategic shift is highlighted by the November 2022 inauguration of a factory in New Delhi, which allows the company to produce around 80 types of building materials domestically. This local production is a key advantage, boosting transportation efficiency compared to importing finished products, and sets the stage for the company to expand its sales channels further.

This expansion comes at a time when Lixil is facing challenges in other markets. Its bathroom fixture operations in the U.S. and Europe are experiencing downturns, with the American Standard unit in the U.S. reporting operating losses and the European division witnessing a sharp decline in profits.

Lixil’s focus on India is part of a broader strategy to mitigate the impact of cooling home sales in the U.S. and Europe due to higher mortgage rates, as well as the expected decline in housing starts in Japan due to a shrinking population.

The company is not only targeting a significant share of India’s window sash market, estimated at around 270 billion yen, but is also adapting its offerings to meet the unique local needs. Recognizing the importance of understanding state regulations and regional business practices in India, Lixil is betting on building strong partnerships with local sales agencies. Additionally, the company is developing India-specific products, considering the country’s unique climatic conditions, through its research and development center in Thailand.

Lixil’s move to expand in India is set against the backdrop of a rapidly growing real estate market, projected to triple to $780.6 billion from 2022 to 2028, and a burgeoning population driving demand for building materials. This strategy positions Lixil to capitalize on these market dynamics, leveraging local production and tailored products to gain a competitive edge over global rivals like Kohler and Schuco, which are more focused on the Chinese market.

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