ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintTitle ChevronIcon Twitter

Japan's air conditioner makers boosting production in Asia

Mitsubishi, Fujitsu see edge in affordable, energy-efficient units on rising demand

TOKYO -- Japanese manufacturers of air conditioners are expanding and enhancing production and marketing operations in Asia, rushing to cater to growing local demand.

Mitsubishi Heavy Industries and Fujitsu General will spend 2 billion to 3 billion yen ($17.3 million to $25.9 million) to ramp up production in Thailand, while Mitsubishi Electric is enlarging its sales networks in India and Southeast Asia.

The makers are mainly responding to the prospect of robust growth in local demand driven by economic expansion in these countries. But they also see local consumers becoming increasingly aware of energy efficiency, creating opportunities for Japan's cutting-edge energy-saving technologies. 

Mitsubishi Heavy Industries Thermal Systems, a subsidiary of the major heavy machinery maker, will shell out 3 billion yen to build a new plant to manufacture air conditioners in Thailand.

The plant will be located near its existing facilities in Bangkok and will boost the company's annual production capacity in Thailand by 30% to 1.7 million units when it comes onstream at the end of 2017. The maker exports products manufactured in Thailand to other Southeast Asian markets and India.

Mitsubishi Heavy is also striving to tailor products to the needs of local consumers. In 2014, the company launched low-priced models for households in Indonesia and in 2015 rolled out energy-efficient, cooling-only systems for business offices that were priced 20% lower than conventional models in Southeast Asia and India.

These products have been popular. In particular, unit sales of the models for offices increased by more than 10% in Southeast Asia and about 30% in India from the previous year. Brisk sales of these products prompted the company to build the new plant. 

Fujitsu General will spend some 2 billion yen to step up production at its Thai plant by about 50% by 2020. The company will also widen its product line, which has been focused on offerings for stores. In addition to raising the output of units for households and buildings, the company will also start offering more low-end and energy-saving models to meet a wider range of demand.

The Fujitsu group company will bring household air conditioners with price tags 20-30% lower than past models to the Indian market in 2017.

The company is also reviewing its sales operations in Asia. This spring, it began direct sales to consumers in Thailand to provide more fine-tuned customer service. It plans to expand the scope of its business transactions with electric appliance retailers in India.

Mitsubishi Electric intends to lift the annual production capacity of its Thai plant by about 40% from the 2014 level to 7 million units by 2018. The manufacturer will also increase its number of sales bases in Vietnam, Indonesia and India by 20% in two to three years and increase its sales and maintenance employees in these countries by 60%.

Daikin Industries, Japan's largest maker of air conditioners, will build a new plant in Thailand to manufacture key energy-saving components for its units. The company is also bumping up the production capacity of its plant in India.

Expansionary wave

In many Asian countries, the ranks of urban middle-class consumers are growing rapidly, generating greater demand for air conditioners.

Sales of household air conditioners in 2020 will be about 50% above 2015 levels in India and roughly 60% higher in the six leading Southeast Asian countries including Thailand, according to Euromonitor International, a British research company.

In major Southeast Asian countries, Daikin Industries, Mitsubishi Electric and other Japanese makers currently control more than half of the markets. But Chinese and South Korean rivals are trying to expand businesses by offering cheaper models.

While competition for greater market share is becoming stiffer, some countries in the region, most notably Singapore, are moving to tighten environmental regulations. The city-state has sharply raised its energy consumption standards for air conditioners.

The move could be a boon to Japanese makers, which have competitive energy-saving technologies. They are betting the trend toward green products can help expand sales and are thus investing in order to offer both low-priced and energy-efficient models. 


Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends October 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more