Chinese Aircon Companies Concentrate on Brand Development and Low-Tariff Manufacturing Plants in Southeast Asia to Increase Export Volumes

Chinese air conditioner companies are facing a double threat: sluggish domestic growth and rising tariffs on exports, particularly to the US. To counter this, they're adopting a two-pronged strategy. Firstly, they're beefing up their branding efforts internationally. This enhanced brand recognition will allow them to compete more effectively in foreign markets and lessen their reliance on China's slowing economy. Secondly, they're ramping up production facilities in Southeast Asia, particularly Thailand and Indonesia. This strategic move allows them to bypass high import duties in key markets like the US, keeping their products price-competitive. Notably, Thailand's AC manufacturing capacity has nearly doubled since 2019, reflecting this trend. Despite the Southeast Asian push, China is likely to remain the dominant AC producer due to its established industry infrastructure and workforce. However, this strategic shift by Chinese companies underscores a changing global landscape in the AC market. As they navigate trade barriers and pursue growth, expect to see continued expansion of Chinese AC brands and production facilities overseas, with Southeast Asia playing a key role.

Source: YICAI