Bosch Acquires 74.2% Stake in JCHAI – Strategic Expansion into India’s AC Market

05 August 2025, India

Robert Bosch GmbH has acquired a 74.2% controlling stake in Johnson Controls-Hitachi Air Conditioning India Ltd (JCHAI), an unprecedented move which demonstrates the company’s growing ambition in the consumer durables sector. Bosch gained operational control and board-level influence over one of India’s well-known AC manufacturers when it acquired the stake from Johnson Controls-Hitachi Air Conditioning Holding (UK) and JCHAC India HoldCo.

This acquisition is not merely a regional takeover; it’s a strategic, long-term shift to broaden Bosch’s product line, increase its presence in the rapidly expanding Indian home appliance market, and to promote the global trend towards smart and sustainable climate control systems.

India’s AC Market: A Snapshot of Opportunity

India’s air conditioning (AC) market is undergoing a fast transition due to growing middle-class incomes, deteriorating weather, and urbanisation. Once thought to be a luxury market, the AC industry is now moving into the mass adoption phase.

Market Growth Trend

India’s AC market is expected to grow from 5.6 billion in 2024 to 16.9 billion by 2032 (CAGR ~14.8%)

In 2024, India surpassed Japan to become the second-largest air conditioner market globally. India had a demand for 11.94 million air conditioners, while Japan came in third with 10.18 million, according to data from the Japan Refrigeration and Air Conditioning Industry Association.

In addition, ICRA anticipates that the Indian room air conditioner (RAC) market is expected to expand by 20–25% per year, reaching a record 12–12.5 million units in FY2025. Rising temperatures, increased demand for air conditioning in homes, urbanisation, rising disposable incomes, and convenient financing options for consumers are some of the reasons for this increase. Growing demand for replacements and a trend towards energy-efficient models will also improve the industry’s prospects.

Deal Overview

The acquisition is a part of a global agreement in which Bosch announced approximately a year ago that it would acquire Johnson Controls’ AC solutions business for residential and light commercial buildings.  As part of the agreement, Bosch agreed to buy out Hitachi’s 40% stake in the Johnson Controls-Hitachi Air Conditioning joint venture in India. The $8 billion global deal is the largest in Bosch’s history. Currently operating in the premium segment and competing with companies such as LG and Samsung, Bosch sells refrigerators, dishwashers, washing machines, kitchen appliances and hoover cleaners in India.  With the acquisition of JCHAI’s AC business, Bosch will expand its distribution and manufacturing scale and become a full-range appliance manufacturer in India.

In FY25, JCHAI recorded sales of ‘2,756 crore and net profit of ’58 crore. Despite a 44% increase in revenue over the previous year, the company also turned a profit after suffering a net loss of ’75 crore in FY24.  According to business leaders, JCHAI also increased its market share, which had previously dropped to a single-digit level. The business faces competition in the air conditioning market from Tata-owned Voltas, LG, Havells, Daikin, and Blue Star.  Under the Hitachi brand, JCHAI delivers a variety of cooling products, including ductable, commercial, and room air conditioners.

In addition to private sector investments in hospitals, commercial and residential real estate, hospitality, and data centres, JCHAI’s most recent annual report stated that the government’s increased spending on healthcare, educational institutions, metro, and railway networks is driving up demand for light commercial air conditioners. By expanding its presence in Bangladesh, the Maldives, Sri Lanka, Nepal, and Bhutan, the company is additionally growing its export business.

Strategic Rationale Behind Bosch’s Acquisition

Portfolio Diversification

Bosch has long been a leader in power tools, industrial technologies, and automotive components. Regarding luxurious kitchen appliances, its BSH Home Appliances brand has seen mediocre success in India. Bosch has, nevertheless, had a relatively small presence in climate-control appliances.

By acquiring JCHAI, Bosch can:

• Enter the residential and commercial air conditioning space
• Enter the consumer appliance market for climate-focused products.
• Utilise the potential for cross-selling within its current product ecosystem.

Market Penetration and Local Manufacturing

JCHAI already has a manufacturing facility in Gujarat, a nationwide sales and service network, and a variety of climate-appropriate products. Bosch can now

• Promote supply chain synergies and cost reductions
• Integrate German manufacturing standards
• Inverter-based, IoT-enabled, and energy-efficient push air conditioners

Technology and Brand Synergy

Despite having strong mid-market and B2B traction, JCHAI has historically had difficulty breaking into the premium urban market. Bosch’s brand is associated with Bosch

• Innovation
• Precision engineering
• Energy-efficient technology

Together, the two brands can create a new tier of premium AC products for Indian consumers.

Competitive Landscape: Bosch Enters a Crowded Field

Bosch’s acquisition will increase JCHAI’s brand awareness, product innovation, and channel competitiveness, allowing the company to increase its market share from 8% to 14% over the coming years.

Thus, Bosch’s acquisition of JCHAI strengthens its presence in India’s expanding AC market and consumer appliance sector. The move enhances its local manufacturing, distribution, and innovation capabilities, positioning Bosch for long-term growth in smart and energy-efficient cooling solutions.