That was the key finding of a study by British and Japanese trade associations released at the most recent IKK Expo here. While noting that air conditioning has a “total worldwide volume of $34 billion with an annual growth rate of 4%,” the report went on to focus on growth in Asia and Europe.
“Consumers in southern Europe have recognized that air conditioners have long ceased to be luxury articles that are beyond their reach,” the report stated.
Mini-Splits And Chillers
Mini-splits are continuing to make an impact overseas. “The largest share of the international air conditioning market in terms of value is held by mini-split units,” stated the report, “whose market share also have the biggest growth rate: 10 percent for larger systems and 7 percent for small splits.”
China was labeled the biggest market for mini-splits and the largest producer of such units. “Over 4 million units are expected to be sold in China between 2000 and 2004; six times that of Japan and Italy,” said the report.
At the same time, the competition to China, from Korea, Thailand, and Malaysia has caused about a 4% drop in real prices. In fact, that market is facing an increasing number of manufacturers. The report said familiar Japanese brands like Daiken, Fujitsu, Hitachi, Matsushita, Mitsubishi, MHI, Sanyo, and Toshiba “are being successfully challenged” by companies such as Chunlan, Gree, Haier, Kelon, and Midea (from China), and LG and Samsung (from Korea).
Window units continue to lose worldwide market share to splits, the report noted. “The United States, where window units make up over half the international market share, is the only exception and the only country where future growth potential exists for window units.” It went on to say that 96 percent of world’s compact units are installed in North America.
Italy was said to be experiencing a high growth rate in chiller installations, although the United States remains the prime place for such installations. One type of chiller that the United States does not use as much is the absorption unit, the report said. These are mainly sold in Japan, Korea, and China.
German ContractorsMedia reports at IKK offered information on contracting companies in Germany from the VDKF, a trade association for contractors. That report described general growth in HVACR to be “moderate,” although flooding during the summer and fall in eastern Germany did provide an upturn in business.
In a survey of contractors, those doing refrigeration work described business as either constant or declining somewhat. That was essentially the same feedback as from those contractors doing heat pump work.
Contractors in the air conditioning sector found business “constant” or “improving.” Noted the report: “The firms interviewed particularly see growth potential in air conditioning plant assembly and maintenance contracts.”
The generally slow pace of business in Germany is causing the majority of contractors to nix additional hiring in the near future. Many of the remaining firms are even planning to cut personnel.
There are some pluses for the future, according to the report. “Positive impulses for demand are expected in air conditioning business and maintenance contracts with respect to new regulations for environmental protection.”
Taking The Industry’s Pulse At IKKJust prior to the fall 2002 IKK show, VDKF surveyed exhibitors about the year ahead.
Feedback from exhibitors from outside of Germany was as follows:
Publication date: 01/27/2003