Türkiye's Strategic Role as Europe's HVAC Manufacturing Hub
For decades, air conditioning was an afterthought across most of Europe. Homes were designed to retain heat, summers were generally manageable, and a few weeks of uncomfortable weather rarely justified the cost or complexity of installing cooling.
That assumption is changing.
The heatwaves of 2026 highlighted how quickly Europe's cooling market can shift. As temperatures climbed across the continent, demand for air conditioners surged, particularly in countries where residential penetration remains low. Retailers faced shortages, distributors struggled to replenish stock, and manufacturers were forced to respond to demand that had changed within weeks rather than over a traditional seasonal planning cycle.
For the HVAC industry, this matters because climate change is altering not only how much cooling Europe needs but also how that demand behaves.
A sudden heatwave can create an inventory challenge almost overnight. Equipment ordered months in advance may prove insufficient, while distributors dependent on lengthy supply chains are often unable to respond swiftly when demand surges. In this context, proximity to the market gains increased significance. Shorter supply chains facilitate quicker replenishment, reduce inventory needs, and offer greater flexibility when forecasts go awry.
This is where Türkiye assumes a progressively important role.
Türkiye boasts a substantial industrial base, a well-established supplier network, and enduring export connections with Europe. The country's HVACR exports rose from $7.1 billion in 2024 to $7.4 billion in 2025, positioning Türkiye as one of the largest manufacturing hubs for split air conditioners catering to the European market.
Its geographical location offers a distinct advantage. Products can be delivered to European distributors via established road and short-sea routes, often much more swiftly than equipment sourced from other continents. For a distributor aiming to restock during an unforeseen heatwave, this speed can be as crucial as the factory price. But proximity alone does not make Türkiye the answer to Europe's cooling challenge.
The events of 2026 underscored Europe's ongoing reliance on Chinese-manufactured air conditioners. Chinese companies have established a robust position in the market through economies of scale, competitive pricing, and increasingly advanced products tailored to European conditions. For instance, Midea's PortaSplit exemplifies how manufacturers have adapted to the diverse building regulations and installation challenges across Europe. This product effectively addresses one of the major obstacles in the market: many European residences struggle to accommodate a conventional outdoor unit. This serves as a significant lesson for Turkish manufacturers. Europe's cooling market is not merely waiting for additional factories to produce standard air conditioners. The landscape is fraught with complexities: historic buildings, restrictions on modifications to façades, high installation costs, stringent energy-efficiency standards, and increasingly rigorous environmental regulations. Manufacturers that aspire to thrive in this environment must tackle these challenges, rather than simply focus on large-scale production.
This is where Türkiye's opportunity becomes more nuanced.
The country is unlikely to displace China by competing purely on price or volume. However, Europe is increasingly concerned about overdependence on individual countries and long-distance supply chains. The debate is less about eliminating Chinese products altogether than reducing vulnerabilities and maintaining alternative sources of supply. Türkiye can benefit from this shift by positioning itself not as a replacement for Chinese manufacturing but as a major regional alternative within a more diversified supply chain.
The potential for this role was evident during the 2026 heatwave. Türkiye's climate-industry exports to the European Union increased 22.9% year on year to $302.5 million in June, with Germany the largest destination, as cooling demand strengthened during the heatwave. While one month does not establish a long-term trend, the increase illustrates how quickly European demand can translate into opportunities for nearby Turkish manufacturers. Türkiye’s ability to respond to this demand is underpinned by a long-standing relationship with the European market. The EU-Türkiye Customs Union, in place since 1995, has helped integrate Turkish manufacturing with European industrial supply chains. Over time, Turkish manufacturers have developed experience in meeting European technical and product requirements, making the transition from manufacturing for regional markets to serving European customers considerably easier.
International HVAC companies also expanded their production in Turkey. Daikin, in 2022, invested €13 million (~US$15.1 million) to establish VRV outdoor-unit production at its Hendek facility with an annual capacity of some 50,000 units. Its increasing R&D presence in Türkiye also signals a more significant position for the country within the company’s European manufacturing network. Other global manufacturers, such as Vaillant Group via DemirDöküm and BDR Thermea via Baymak, have significant heating and cooling businesses in Türkiye. Türkiye's strategic value also extends beyond its ability to serve Europe. Its location provides manufacturers access to the wider Eurasian market, allowing the same production base to serve both directions.
Türkiye enters this transition with several advantages already in place: a mature industrial ecosystem, skilled manufacturing capabilities, established European trade links and a location that offers resilience at a time when global supply chains are being re-evaluated. The question is no longer whether Türkiye can manufacture HVAC equipment competitively, as it already does. The bigger question is how large a role it will play in supplying Europe’s next generation of heating and cooling technologies. As climate change reshapes demand across the continent, Türkiye is increasingly positioned to become one of the key manufacturing and supply hubs serving Europe's evolving HVAC market, combining proximity, production scale and regional connectivity with an established industrial base.
Author: Ishu Dhani
Source: BRG Research
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