Prices are falling at 10% a year as
competition becomes even more intense. There are
40 local manufacturers of minisplits, and most
key components such as compressors are also
locally made.
Thailand manufacturers provide 1.2 million
window units and 2.1 million minisplits, mainly
for export. The products are high quality and
are sold at competitive prices mainly to the OEM
market. However, the main exporters are becoming
concerned about vigorous competition from
Chinese manufacturers in overseas markets, which
are high quality and potentially even lower
priced. To protect Thailand manufacturers at
home, the government has imposed a high import
duty on residential air-conditioning products
imported from outside AFTA.
Thailand manufacturers provide 1.2 million
window units and 2.1 million minisplits, mainly
for export. The products are high quality and
are sold at competitive prices mainly to the OEM
market. |
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However, the main exporters are becoming
concerned about vigorous competition from
Chinese manufacturers in overseas markets, which
are high quality and potentially even lower
priced. To protect Thailand manufacturers at
home, the government has imposed a high import
duty on residential air-conditioning products
imported from outside AFTA.
Thailand manufacturers provide 1.2 million
window units and 2.1 million minisplits, mainly
for export. The products are high quality and
are sold at competitive prices mainly to the OEM
market. However, the main exporters are becoming
concerned about vigorous competition from
Chinese manufacturers in overseas markets, which
are high quality and potentially even lower
priced. To protect Thailand manufacturers at
home, the government has imposed a high import
duty on residential air-conditioning products
imported from outside AFTA.
Close control (for critical applications) is
another market expected to grow at 10% a year,
boosted by significant growth in mobile phones
-- reception on these is often better than for
land lines.
The central plant market is growing strongly
-- particularly centrifugal chillers -- as the
market has been bouncing back after it crashed
down 57% by value after 1996.
Thailand Air-Conditioning Market, 2001
Minisplits
Minisplits account for 95% of all room and
packaged sales by volume and 85% by value.
Because most housing in Thailand consists of
one main room and a shower, the market is
dominated by single splits, with the vast
majority below 5kW.
For larger dwellings the practice is
typically to have more than one smaller unit
rather than one large capacity unit, because
there are no restrictions on the number of
outdoor units placed on buildings, and
multisplits are expensive. Low-cost wall types
dominate, although the flexi-type floor/ceiling
units are often used in bigger homes requiring
larger sized splits.
The Thai room and packaged market fell by 33%
between 1997 and 1999 and the market will only
return to 1997 levels during 2003. As a result,
prices across the sector have continued to fall.
As competition becomes even more intense at home
and abroad, despite the rising market, prices
will continue to fall at around 5% a year in
real terms.
However, rapid growth of the minisplit market
is expected at more than 10% a year. Residential
penetration is only around 40% despite the
extremely hot climate and there is considerable
potential for further increases, particularly
outside Bangkok. Currently 75-80% of
air-conditioning sales are around Bangkok,
Chiang Mai and Phuket. A significant replacement
market has emerged, now accounting for 15% of
sales. Larger sized commercial splits will also
increase strongly with variable refrigerant flow
(VRF) systems growing at an accelerated rate.
Currently only half of all smaller minisplits
are sold for residential applications, the rest
are mainly to retail and office applications,
but a slow increase in the share of residential
applications is now expected.
A key feature of Thailand is that there are
essentially no imports of room and packaged
products while Thailand is one of the world's
largest exporters of RAC windows and minisplits.
In round terms, production is about 1.2 million
window units and 2.1 million minisplits and only
an estimated 400,000 of those units (mostly
minisplits) are intended for the Thai market.
Many of the 'export hungry' Thai
manufacturers supply to OEM including the large
U.S. companies and some European and Middle
Eastern brands. For example, a Thailand
manufacturer supplies O-General, the market
leader of minisplits in Iran.
Levels of production have increased as many
international air conditioning companies have
also set up production facilities to meet the
growing Thai market as well as export to the
Middle East. In all there are eight Japanese and
two American factories.
Costs in Thailand have traditionally been
very low because of low labor costs, but also
because of the intense competition -- at least
40 different local companies manufacturing
residential split units -- many of the local
brands produce only wall splits. In addition,
unit production costs can be kept low in
Thailand because key components, such as
compressors, are manufactured in Thailand,
resulting in lower prices. Despite the low costs
Thai products are considered to be of a good
quality.
However, even the larger Thai manufacturers
are concerned about the competitiveness of the
main Chinese manufacturers. Although they have
yet to make much impact in Thailand, they are
vigorously competing in many export markets.
Thailand manufacturers may soon start to lose
market share abroad to the lower priced, yet
sophisticated Chinese products.
In response to the renewed threat, the Thai
government has already imposed a high import
duty on residential air-conditioning products
coming from outside of AFTA to protect domestic
production, but this is not expected to have
much impact on the threat to the export market.
Thailand room and packaged market,
volume (units), 1996-2005
Central Plant
The central plant market crashed after 1996
from U.S. $77 million to U.S. $33 million, a
drop of 57% in 1997. Strong growth in the market
is now forecast, with centrifugal chillers
growing by 12% a year, but this is merely a
reflection of the market partly 'bouncing back'
with some delayed large projects. Despite this
growth, the market is not expected to recover to
1997 levels until after 2005.
The chiller market is almost entirely
imported. The main reason being that centrifugal
chillers, which form over half of the market by
value, are normally imported from the USA. Other
types of chillers mostly come from the Asian
region. The import tax on chillers is only 5% in
contrast to the 21% levy for other central plant
products.
The air-handling unit market, which is mostly
manufactured locally, has failed to pick up
since 1999 as many of the chillers sold recently
have been for replacement. Industry sources say
that demand is shifting towards the industrial
sector and the product mix is changing.
The fan coil market is mostly the horizontal
concealed type but there are significant sales
of wall and console cased units. Like chillers
the market is growing briskly, but even after
2005 it will be some 30% below its peak of 1996.
For more information, visit
BSRIA
online
Bangkok Companies is a full service
product sourcing company in Thailand.
For your Air Conditioner needs please email
bangkokcompanies@gmail.com with your
requests.
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- Office & Commercial Air
Conditioning
- Industrial Air Conditioning
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