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issue: September 2004 APPLIANCE Magazine

Tokyo Report
Japanese AC Makers Increasingly Go Abroad


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Wasaku Ishida, Japanese correspondent, APPLIANCE magazine, and vice president, JARN (Japan Air Conditioning, Heating & Refrigeration News)

The Japan Refrigeration and Air Conditioning Industry Association (JRAIA) estimates that 46.45 million air-conditioners were sold worldwide during 2003, up 3.6 percent from the previous year.

Room air-conditioners (RACs) and packaged air-conditioners (PACs) experienced its highest sales in the European, U.S., and Chinese markets. Additionally, JRAIA estimates the average growth rate for RAC sales to be 8 percent for the European markets and 6 percent for the Asian markets, including Japan. China, the world’s largest market, with a yearly demand topping 20 million units, is predicting a nearly two-digit expansion. As a result, many Japanese air-conditioner makers are planning to increase overseas production by moving domestic production facilities to optimum production sites overseas. It is said that the share of total overseas production for domestic makers already tops 50 percent.

Expanding Capabilities

Last year, Daikin Industries announced plans to establish an indoor unit production facility in the Eastern European Czech Republic. The factory is predicted to have a yearly production capacity of 300,000 units . Among Japanese makers, Daikin secures an overwhelmingly large share of the commercial air-conditioner segment, including VRF systems. Additionally, in the residential air-conditioner segment, the company intends to secure a firm foothold in the global market.

Hitachi Home & Life Solutions has established Hitachi Home Appliances Co. in Wuhu City, Anhui Province, with full-scale production of air-conditioners. By increasing its production capacity to 600,000 units, the company will supply half of its units to Japan, and the remaining half to China and other countries. By operating an R&D facility in Shanghai, the company intends to reinforce the development of global models. In the future, Hitachi says it will enhance the quality of its air-conditioners and other white goods, along with its brand value, thereby raising the sales share of products with higher added value and increasing its consolidated share of overseas sales to 30 percent by 2006.

Toshiba Carrier increased Toshiba-brand air-conditioner sales in the European and Asian markets last year by utilizing Carrier’s sales network. China has become the third overseas hub for Toshiba Carrier, following the U.K., in which Carrier holds the majority share. As part of its strategy for the Chinese market, Toshiba Carrier, along with China’s number-two air-conditioner maker, Midea Group, established a new company in the component (compressor) business with the goal of expanding the supply of compressors to Chinese makers. By collaborating further with Midea, Toshiba Carrier also plans to establish air-conditioner production/sales subsidiaries.

Fujitsu General says its overseas sales, especially in the European market, are expected to expand favorably. “Even in winter last year, those [air-conditioners] purchased by end users showed a two- to three-fold growth over the previous year, reflecting the effects of heat waves upon demand,” the company said. Fujitsu plans to adequately respond to local dealers by reducing cost and reinforcing supply chain management. For the Chinese market, the company intends to nurture its own sales routes, with plans to sell models with higher added value to high-income earners in Shanghai and Beijing.

 

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