As the rapid economic growth has supported the middle class, Vietnam has become the second largest air-conditioning market in Southeast Asia, and global air-conditioning manufacturers are competing in Vietnam.
In 2011, the refrigeration system market in Vietnam sold only 660,000 units, ranking eighth in Asian countries that did not include Japan and China. However, Vietnam surpassed Thailand in 2015, and in Vietnam it was 1.98 million in 2016. The sales volume of the suite will raise its ranking to the third place, ranking behind India and Indonesia.
According to the report of the Japan Refrigeration and Air-conditioning Industry Association, the global air conditioner market grew by 2.5% from 2011 to 2016, but the growth rate in the Asian market reached 34.3% over the same period, and air-conditioner sales in the Vietnamese market increased threefold to 150 billion yen (according to the exchange rate at that time, approximately For 1.35 billion U.S. dollars).
Vietnam’s growing wealth has driven the rapid expansion of the air-conditioning market. Vietnam’s economy is growing at an annual rate of 7%, ranking first in Southeast Asia. In developing countries, refrigerators and washing machines are often the first to popular white goods. With a per capita gross domestic product (GDP) of 3,000 U.S. dollars, the demand for air-conditioning will increase dramatically.
In 2017, the per capita GDP of Vietnam was about US$2,300. However, the per capita GDP of Ho Chi Minh City exceeded US$4,000, and the per capita GDP of Hanoi reached more than US$3,000. The demand for the first purchase of air conditioners in large cities and other places is very strong.
Daikin Air Conditioning Displayed at an Electrical Appliance Store in Hanoi (Image by Nikkei Shimbun Website)
Some air-conditioning companies, such as Japan’s Daikin Industries Co., Ltd., have taken note of the dynamics in the Vietnamese market and are increasing local air-conditioning production. Daikin invested 10 billion yen in a suburb of Hanoi to build an air conditioner with an annual capacity of 1 million. The factory will use the technology accumulated in India to introduce an advanced production line to reduce inventory and shorten delivery time. Daikin also has a production plant in Thailand with an annual capacity of 2.5 million air conditioners and its factory in Malaysia. Annual production capacity is 1 million sets.
The Daikin Hoi factory also has a training center that is expected to train 10,000 local production, installation and maintenance of skilled workers by 2020. Some of these workers may be sent to Japan. Daikin plans to receive most of the local retailers. Students, but also exploring cooperative relations with local technical colleges to get more top talents.
The Daikin Hoi factory uses a unified workstation to modularize the main tasks of welding and assembly, so that simply plugging these modular tasks into the power supply makes it very easy to access the production line. This allows the production line to be treated like Lego bricks. Quickly assembled to increase responsiveness to air-conditioning demand based on weather changes. In May last year, Daikin opened a large factory in Texas, USA, using the same system.
The plant will also use IoT technology, use sensors to monitor production speeds in real time, and detect equipment failures or delays. Daikin intends to introduce the system into its global production plant, likely to rely on skilled workers trained in Vietnam. To achieve this goal.
At the same time, Daikin plans to increase its sales and service network. By 2020, it will triple its number of dealers to 2,000 and its repair center to 25. Daejeon plans to increase its sales in Vietnam in fiscal year 2017. On the basis of 50 billion yen, it will double to 20 billion yen in fiscal year 2022.
In the air-conditioning industry, especially in developed countries, people usually judge the company’s situation based on the after-sales service provided by air-conditioning companies, such as maintenance. Daikin hopes to invest 10 billion yen in 2020 and set up a business in Ho Chi Minh City. The training center and the exhibition center serve as part of its new local headquarters. Daikin hopes that this facility will serve as an export center for maintenance and other service personnel.
Daikin expects that in the fiscal year 2017 ending in March this year, its sales in Asian markets other than China will reach 274 billion yen, an increase of 9%. This accounts for only a little more than 10% of Daikin's air-conditioning business, but Daikin This region has been listed as a key market with the United States.
'Given the growth of the middle-class family, the demand for air-conditioning will be strong in the long run,' President of Daejin and CEO Shihei said, 'We will expand our sales network in cities and regions and increase Supply leads our opponents. '
In addition to Daikin, other Asian air-conditioning companies are also following suit. South Korea’s LG Electronics has invested US$1.5 billion in the display and air-conditioning production plant in the northern Vietnamese city of Haiphong to increase production capacity by 2028. Matsushita, Japan, is working on Increase the production capacity of Malaysian factories to expand the supply to the Vietnamese market.
Daikin and Panasonic each control approximately 25% of the air-conditioning market in Vietnam, followed by LG, Samsung Electronics of South Korea and Electrolux of Sweden. Consumers are increasingly valued for energy efficiency and performance of air conditioners compared to lower prices. The reputation of Japanese brands in Vietnam continues to increase.
Daikin's sales in Vietnam continued to grow by more than 30%. This is largely due to the introduction in Vietnam of energy-efficient air-conditioner models using variable-frequency technology that can control the speed of the compressor motor to continuously adjust the temperature. The price of Daikin Inverter Air Conditioning reached 12.7 million VND (about US$558), which is 30% higher than the price of LG's competitive products, and more than 80% higher than that of Chinese companies, but the manager of a local electronics store in Hanoi stated that Daikin air conditioning is still the store's best-selling air conditioning product.
A 64-year-old man in Hanoi stated that he recently bought two Daikin air conditioners because he had bought too much noise from LG air conditioners. He had previously conducted the most silent and most energy-saving air-conditioning models on social networking sites. the study.
With a population of 93 million, Vietnam is one of the most populous countries in ASEAN. Compared to the maturing air-conditioner markets in Malaysia and Thailand, Vietnam is seen as a more potential air-conditioning market. According to data from Euromonitor, a UK research company Only 17% of households in Vietnam had an air conditioner last year, and Vietnam's air-conditioning market is expected to grow further.