China is now the fourth biggest economy in the world with a 1.3 billion population. The GDP growth was around 10 per cent for 2006 and this trend seems set to continue in 2007. China continues to be the world leader in the air conditioning market. In 2006, the Chinese market for packaged air conditioning alone was estimated at a value of US$ 8,909 million, which represented a 10 per cent increase in value from 2005. Sales of packaged air conditioning units have slowed in cities such as Beijing, Shanghai and Guangzhou.
In 2006, the Chinese market for central plant air conditioning was valued at US$1,924 million, which represents a 19 per cent increase from 2005. Until 2006/2007, the prices of residential air conditioning units were declining, however the trend has now shifted. Many suppliers claim that the increasing cost of raw materials has forced them to increase their prices, but since consumers are becoming more brand orientated and less price sensitive, it is expected that the price increase will stick.
Window & Moveables
Windows and through the wall unit sales continue to fall, with the market estimated at US$64 million in 2006. Due to their higher noise levels and poor aesthetics, window units are now losing market share to minisplits. Like the windows market, the moveables market is in decline. In 2006, the sales of moveables were estimated at approximately US$14 million. In China, the priority for moveables is to supply overseas markets rather than the domestic market.
Minisplits & VRF
Minisplits have remained the dominant product type in the Chinese market and account for 97 per cent of the total packaged market in volume terms. In 2006, sales within the minisplit market reached US$8,369 million, which represented a 9.2 per cent increase in value from 2005.
Chinese-owned companies have dominated the market for many years. It is estimated that the top three leading companies have share of 55 per cent of the total sales in this market. Competition within the minisplits market remains intense. Many of the major players have growing market share and consequently the market has become less fragmented over the years.
Most minisplits are of the heat pump type. Cooling only units account for just 26 per cent of the total market by volume. Wall units are the most popular type of indoor unit, with 63 per cent of the market share.
Daikin is the clear market leader in VRF products, and has a significant share in the minisplits market. Sales of VRF products are driven by the growth of the high-end residential market, particularly around the Shanghai area. However, 75 per cent of sales are still into the commercial sector.
Large Packaged & Close Control
US brands such as McQuay (Daikin), JCI (York), Trane and Carrier dominate the large packaged market. The market for US style ducted splits is expected to grow at around 7 per cent each year until 2011. In 2006, 105,400 of these units were sold in China. With regards to rooftops, this product is mainly imported due to small demand. For indoor packaged, it is still considered as a low cost solution for large spaces where noise and aesthetic requirements are not priority.
With regards to close control, imported brands continue to dominate. The Emerson network (which owns Liebert-Hiross and Atlas) and Stulz are the market leaders with a collective share of 55 per cent of the market.
China is the largest chiller market in Asia; the overall sales of chillers in 2006 totalled 82,816 units. Smaller sized chillers account for 41 per cent of the products in the chiller market. Reciprocating chillers are not disappearing from the market as previously anticipated. Scroll chillers are fast becoming the most dominant product within the chiller market, accounting for 74 per cent by volume in 2006.
Air Handling Units & Fan Coils
Alongside the increasing demand for chillers is a growth for air handling units and fan coils. The air handling market has experienced a significant growth; the total sales in 2006 of this product reached 145,000 units. Sales of fan coil in 2006 reached 1,577,000 units, with the market dominated by concealed horizontal types, which account for 74 per cent of the total sales.
For the central plant air conditioning market, Chinese companies are establishing a stronger presence than ever. Previously, large international companies dominated the market; nowadays, however Chinese companies such as Haier, Midea and Gree are having great success in the home air conditioning market.
Statistical data in this article is quoted from the Chinese Market for Air Conditioning study, published in October 2007. Modular reports are available for Chillers, Airside Products, Windows and Moveables, Minisplits and Large Packaged and Close Control. For more information please contact Jon Williams at WMI.