Air conditioner vendors battle it out over Vietnam
Japanese Daikin Industries will invest $93.6 million to build an air conditioner manufacturing plant in Vietnam, as part of its plans to capitalise on the Southeast Asian nation's potential for rapid growth, according to newswire Nikkei.com.
The plant will be located in an industrial park in the outskirts of Hanoi and is expected to start operation in 2018, with an annual capacity of 500,000 units. The figure will increase to one million by 2020, depending on the demand.
The reason for constructing the plant in Vietnam is that almost all Daikin air conditioners in Vietnam are imported from Thailand, while its Thai production facilities have been operating at full capacity since the third quarter of 2015, yet still falling short to meet the increasing demand in Vietnam market and other countries.
In addition, Daikin is facing market saturation in Japan and other developed countries. Furthermore, the company has to compete with large brands, namely Chinese Gree Electric Appliances and American United Technologies, which are boosting investment in their Southeast Asian markets.
In Vietnam, Daikin is expanding its speciality outlets. The company will also double the number of service centres to 30 by the fiscal year of 2020.
Vietnam has a population of about 93 million with steadily increasing income, who consume about two million air conditioning units per year. The figure has increased by an average of 30 per cent annually.
Thus, Vietnam is considered a desirable market by numerous air conditioner producers, namely Panasonic, Samsung, Hitachi, Toshiba, Nagakawa, Mitsubishi, and Carrier, among others, a number of whom established air conditioner assembly facilities in Vietnam, including, Panasonic, Hitachi.
Regarding Carrier, the group opened representative offices in Hanoi and Ho Chi Minh City in 1991. In March 1997, the company was licensed to establish Carrier Vietnam Air Conditioner Co., Ltd., which specialises in assembling, manufacturing, and distributing air conditioners.
In April 2011, Japanese air conditioner Nagakawa was licensed to build a plant in the northern province of Vinh Phuc, with a capacity of 250,000 products per year. However, in July 2011, the company submitted a document to the Vinh Phuc People’s Committee to withdraw from the project due to difficulties in land clearance.
In 2015, Samsung released plans to develop a plant in Vietnam in 2016, however, as of now, there has been no further movement on it.
By Phuong Vy, VIR