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|Daikin's arrival will heat up the already contested market|
Located in the northern province of Hung Yen, the $100-million factory has a capacity of 500,000 units a year, which is planned to increase to one million units by 2020, to cash in on the growing demand for residential-use air conditioners in the country, which is predicted to rise to 40 per cent (market penetration) by 2020 from the current 22 per cent.
According to Ly Thi Phuong Trang, president of Daikin Air Conditioning Vietnam JSC, the Asia-Pacific region is among Daikin’s most important investment destinations in the world. In Vietnam, residential-use air conditioner sales were 2.3 million units in 2015 and are forecast to climb to four million units in 2020. Residential-use air conditioners rank fifth in long-lasting consumer products in the country, just behind automobiles, TVs, refrigerators, and washing machines.
Over the past few years, Daikin has been importing air conditioners to Vietnam, mainly from its subsidiary in Thailand. The Thai production facilities have been operating at full capacity since the third quarter of 2015 due to growing demand from Vietnam and other markets. Also, supply have lately failed to keep pace with demand.
With Daikin's move in, competition in the local market is expected to heat up. Other market leaders are now Panasonic, Samsung, Gree, LG, Midea, Mitsubishi, Sharp, Toshiba, and Electrolux.
Currently, Daikin Industries has operations in Japan, China, Australia, India, Southeast Asia, Europe, North America, and South America.
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