Thailand's Rise as Global Export Powerhouse for Air Conditioners
- brg_news_room
- 12 hours ago
- 4 min read
Thailand has emerged as ASEAN's leading air conditioner (AC) export powerhouse, producing around 21 million units in 2024 and ranking as the world's third-largest exporter after China and Mexico (marginally behind Mexico by value). Thailand’s export revenues hit approximately 7 billion USD in 2024, with over 19 million units shipped globally. Key production clusters thrive in Thailand's Eastern Economic Corridor (EEC), including Rayong, Chonburi near Laem Chabang port, and Chachoengsao. These hubs support efficient logistics and domestic sourcing of 70-80% of components, importing only high-tech parts like sensors. Government Board of Investment (BOI) incentives, such as 15-year tax exemptions and duty-free machinery imports, fuel further growth through 2030.
Thailand mainly exports split units (approx. 60-65%), window units (25-30%), and VRF systems (10-15%) alongside parts like PCBs and compressors. Major players include Daikin (market leader in local production), Mitsubishi Electric (strong in residential/commercial), LG, Haier (new Chonburi factory for nearly 3 million units with about 85% export, capacity to reach 6 million by 2027), and Midea (4 million unit capacity, majority of production going to exports). Other companies such as Panasonic, Samsung, Hitachi, Trane, Carrier, and Toshiba also operate their manufacturing bases in Thailand, blending Japanese precision with Chinese scale for energy-efficient, smart ACs.
Generally, the US takes 35% of exports, followed by Europe (25%), ASEAN (20%), Australia (10%), and Japan (10%). Trade data shows Vietnam, India, the Philippines, Indonesia, and the US as top recent destinations. Rising global heatwaves and urbanisation drive this demand. The development in 2025 stemmed out of the post-tariff scenario, with Thailand having a competitive edge in window units, boosted by lower post-tariff pricing against Chinese goods facing steeper US duties. In fact, the exporters rushed shipments before the US enforced a 19% reciprocal tariff on Thai imports starting August 1, 2025, plus a 50% tariff on steel components under Section 232. In the first seven months of 2025, the US already took 59% of Thailand's AC exports, nearly all window units. The US market shows a strong preference for window type air conditioners, accounting for over 95% of total imports, in contrast to the split systems. Currently, over 97% of Thailand’s air conditioner exports to the US fall under two main categories, where Thailand holds the largest market share. Its key competitors include China, Mexico, and Indonesia. While the new tariffs are likely to intensify competition from Mexico and Indonesia, Thailand stands to gain a competitive edge over China. Even after price adjustments due to the new import duties, Thai air conditioners remain 13%–23% cheaper than Chinese units, whereas before the tariff, Thai products were 3%–18% more expensive. However, the recent US Supreme Court ruling on tariffs could change the entire scenario in 2026.
Edge Over India and China
Cost & Quality
Thailand achieves manufacturing costs 10-15% lower than China post-tariffs while maintaining superior build quality through Japanese-influenced standards and a skilled workforce of over 196,000 in HVAC industry cluster. China's vast scale drives low base costs but faces US tariffs of 19-50% on AC imports, eroding competitiveness, whereas India's cheaper labour is offset by nascent high-tech capacity, limiting complex inverter production.
Logistics & Infrastructure Edge
Thailand's Eastern Economic Corridor (EEC), a government-designated special economic zone spanning Rayong, Chonburi, and Chachoengsao, features world-class ports like Laem Chabang, enabling 1–2-week shipping to ASEAN and US West Coast versus longer routes from inland China or India. This infrastructure, plus 70-80% local component sourcing, reduces lead times and costs compared to India's 80% import reliance on inverter electronics (primarily from China).
Trade Agreements in Conjunction with Market Access
Free Trade Agreements (FTAs), including ASEAN agreements and bilateral pacts with the US, Australia, and Japan, grant Thailand tariff-free or low-duty access to key markets, bypassing barriers that hit Chinese exports. This eases entry into the US (35% of Thai AC exports) and Europe (25%), where India's limited FTAs hinder scale. The US-Thailand negotiations on reciprocal tariffs took place in October 2025. According to the agreement framework, as per the White House presser, Thailand agreed to eliminate tariff barriers on approximately 99% of goods, covering a full range of U.S. industrial and food and agricultural products. However, the United States maintained reciprocal tariffs at 19%, as set forth in Executive Order 14257 of April 2, 2025.
Regulatory & Sustainability Alignment
Stricter Thai regulations on low Global Warming Potential (GWP) refrigerants such as R32 and upcoming R290 align with global eco-standards from the EU and US, ahead of India's slower adoption and China's variable enforcement. Board of Investment (BOI) incentives further support green tech shifts, enhancing Thailand's appeal for premium, compliant products.
In a nutshell, Thailand provides a compelling alternative to China and India in air conditioner manufacturing due to its balanced cost structure, high-quality output, and efficient regional logistics, making it a preferred hub for global supply chains and consequently an export powerhouse.
Himanshu Labroo
Source: BRG Research
Find out more in our latest edition of Thailand HVAC report.
To purchase the detailed report, visit our online shop. BRG Heating and Cooling Report
For more information, please contact us at:
Email: europe@brggroup.com
Tel: + 44 (0) 20 8832 7860
