Daikin Plans to Start Manufacturing Unit for Air Conditioners in Vietnam

Vietnam: The growing demand of air conditioners in Southeast Asia market is expected to grow over USD93.6 billion and the plant will be situated in government designated industrial zone. Daikin’s Production of air conditioner is expected to start in 2018, with yearly capacity of around 500,000 air conditioner units. The capacity of the air conditioner plant will increase approximately to 1 million units by 2020, which will be depending on demand in southeast Asia.

Daikin imports air conditioners to Vietnam, mainly from the air conditioner factory in Thailand. Daikin’s production factory in Thailand had been operating at full capacity since 2015, because of rising demand from Vietnam and other Asian markets., But due to rapid growth in demand of air conditioner the Daikin’s production in Thailand has failed to keep the pace of supply.

According to TechSci Research, with a population is approximately 93 million in 2015, the country ranks third among the Southeast Asian Nations, behind Indonesia and the Philippines. The growing demand of household air conditioner in the Vietnamese market, is one of the biggest market in Southeast Asian region, with estimated annual demand is 2 million units of air conditioners. The sales of air conditioners in Vietnam are projected to grow at an average of over 30% year-on-year. Daikin has more competition in maturing markets at home, and in other developing & developed countries. Globally in air conditioner market, Daikin is competing against China’s Gree Electric Appliances, United Technologies of the U.S. and other multinational industry in this segment. All the competing companies are also investing in Southeast Asian market, due to growing demand of air conditioners.

According to a recent report published by TechSci Research, “Global Air Conditioners Market Forecast and Opportunities, 2020”, global air conditioner market is projected to grow at a CAGR of 8.5% during 2015-20. In addition to the residential segment, growing hospitality and tourism sectors are contributing significantly towards rising demand for air conditioners across the globe. Introduction of energy-efficient air conditioners and air conditioners with in-built air purifiers is expected to boost air conditioner sales in the coming years. Split air conditioners dominated the global air conditioners market over window air conditioners, and this trend is expected to continue during the forecast period. The adoption of window air conditioners, VRF system, chillers and portable air conditioners is also expected to grow over the next five years. Few of the major air conditioner manufacturers with significant global footprint include Gree, Daikin, Toshiba, Carrier, Midea, LG, Panasonic and Trane.