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The Thai air conditioning marketFebruary 2008

In 2006, the value of the Thai air conditioning market reached US$561 million, of which 86 per cent is packaged products, with an annual growth of twelve per cent. Indeed, Thailand is the second largest world manufacturer of packaged products. The central plant market, which was estimated at US$80.1 million, in 2006, is growing more slowly - by around 3.5 per cent in value terms over the period 2006-2010.

The recent political coup affected the Thai economy, and resulted in low levels of investment, and a negative effect on the central plant market. Whereas 2007 was perceived to be an adjustment period from a relatively flat market in 2005-2006, the outlook for 2009-2010 is more optimistic.

The performance of the chiller market was disappointing in 2006, due to a difficult economic and construction climate. Chillers represent four per cent of the central plant market by volume, but 64 per cent by value. Many chillers are air cooled, representing 44 per cent of the volume sold.

Reciprocating chillers continue to be a declining market in Thailand and very few companies carry this product in their portfolio. It is expected that this segment will remain flat. Scroll chillers are considered to be a small segment, because consumers prefer to opt for chillers of less than 35kW capacity. Screw chillers continue to hold a large proportion of the market; in 2006 the market was valued at US$25 million.

Centrifugal chillers' growth rate remains strong; the demand for large chillers came mostly from large shopping centres. The market for reciprocating chillers is negligible and very few companies carry these chillers in their portfolio. For absorption chillers, the market remains very small, but the value of this segment is expected to increase due to plans to implement a new district-cooling project in the next few years.

Air-handling Units and Fan Coils
Sales of air-handling units reached US$21.5million in 2006. The majority of air-handling units sold are single skin models, however despite their popularity, the units account for only 30 per cent of the market.

All air-handling units in Thailand are sold without a heat recovery option. Single wall construction type is the most popular unit, as they accounted for over 60 per cent of the total market in 2006. In the same year fan coils experienced a drop of seven per cent in volume. Cooling only fan coils represent the total fan coil market; therefore all fan coils are two pipe only. Concealed units are the dominant product in the fan coils segment. VAV units are not in demand in Thailand are they are perceived as more expensive and are seldom recommended by HVAC designers.

Windows and moveables
The market for window units in Thailand is not significant; many companies have removed them from their portfolio. It is expected that this market will remain non-existent in the near future.

Central Air is the largest local company selling moveables, and it is estimated that around 6,800 units are sold each year. The market for moveables is quite stable. The main applications are small open shopping spaces and stalls, primarily on the markets. Units of less than 3.5kW capacity are the most popular type and account for 40% of the market. All moveables are imported from China. 

In 2006, the Thai minisplits market was valued at US$444 million, which includes the VRF market. The VRF market is the fastest growing segment worldwide; Thailand no exception.

The hi-wall type is the product leader the minisplits market. A common trend amongst customers is to buy a second minisplit. One is normally installed in the bedroom and the second in the living room. All units are cooling only. It is expected that the minisplit market will grow by 8.5 per cent in volume during 2008-2009 and by twelve per cent from 2009 onwards.

Japanese companies continue to dominate the minisplits market. Mitsubishi remains the long-term leader in this market, followed by Panasonic and Daikin. Recently LG strengthened their position in the market with increased sales in 2005-2006.

VRF systems remain the key driving force in the growth of the minisplits market. It is the fastest growing segment not only in Thailand but also worldwide. It is predicted that the annual growth will reach 40 per cent of the market volume each year during 2008-2011. Outdoor units account for the majority of the market share with more than 70% of sales. Heat recovery is not used in VRF systems. Daikin, who pioneered the technology, are the market leaders in the Thai VRF market.

In 2006, the market for US-ducted type was valued at US$24.5 million. Trane and Carrier dominate this market, followed by JCI (York). The demand for the US ducted type is mainly project based and large ducted splits are not used for the residential sector.

Since 2006 the rooftop market volume has being virtually zero and will remain insignificant in the near future. Indoor packaged market is losing popularity; there is a loss of interest from consultants and designers. It is likely that this market will not experience significant growth in the near future. The unitary segment will increase slightly by two per cent in volume, which will not be very noticeable. It is expected that VRF will win some of the potential projects from US-ducted splits.

Close control
The close control market growth slowed down in 2006 with an estimated 418 units sold and the market will decrease slightly in 2007. In terms of capacities, the majority of equipment sold is less than 28kW segment.

Within the packaged air conditioning market, Carrefour and Tesco account for approximately 15% of the minisplits sold in Thailand. Also in the minisplits market companies tend to have many levels of dealers; normally the set up is with a master dealer followed by subdealers. It is more common for US-ducted splits and VRF systems to use the ‘direct sales to end-user’ route. Unitary and VRF type dealers represent the second largest distribution channel in the packaged air conditioning market.

Direct channel is the route that the majority of central plant equipment is sold through. For fan coils, air-handling units and medium range chillers, installers and contractors often link the manufacturer and the end user.

Statistical data in this article is quoted from the Thai 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 on this study please contact Jon William at WMI.