Daikin sees heat pump sales doubling in Europe

JAPAN: Daikin is targeting sales of JPY4,550bn ($32.5bn) in 2025 as a result of increasing demand for heat pumps in Europe and a burgeoning air conditioning market in India.

The Japanese manufacturer has committed JPY800bn (US$5.7bn) to capital investment over the next three years, as well as JPY390bn ($2.8bn) on R&D.

Revealing its intentions under its latter-half 3-year Fusion25 management plan last week, Daikin's president and CEO Masanori Togawa admitted that heat pump sales were currently growing much faster than expected. "We would like to further expand this growth," he said. "In Europe, we aim to achieve the dominant number-one position. Not only that, but we would like to work on the promotion of heat pump conversion projects in the US, China, and other countries around the world as we see the potential for growth in this area."

Sales of the company's Altherma heat pumps in Europe are predicted to more than double from the target of JPY260bn this year to JPY600bn in 2025. European sales of air conditioners are also predicted to increase from the current JPY650bn ($4.6bn) to JPY800bn ($5.7bn) in FY2025.

With the market stock of air conditioning equipment in India expected to quadruple by 2030 compared to 2020, Masanori Togawa revealed that, in addition to the plant currently under construction in Sri City, Daikin was considering a new plant in the west of the country.

"In India, the government has positioned air conditioning as an important industry, and we hope to develop it not only for the domestic market but also as an export base to the Middle East and Africa.," Togawa said. "We are looking at India as the next growth frontier after China. By establishing an integrated system from parts procurement to production in India, we intend to make India the cornerstone of our global strategy and accelerate our business development."

With the global market in different stages of HFC phase down, Daikin says it will continue its efforts to convert to R32, while selecting the most appropriate refrigerant for each region.

With the US phase down under the AIM act due to begin in 2025, Daikin says it will launch R32 commercial products ahead of its competitors.

"Since further tightening of refrigerant regulations is under consideration in Europe, we will also develop equipment using natural refrigerants such as R290 propane or CO2," said executive officer, general manager of corporate planning Hiroaki Ueda. "We will continue to develop next-generation refrigerants for air conditioning and automotive applications."

In an effort to become the number one air conditioner manufacturer in North America in terms of sales in FY2025, Daikin says it will drive the North American market with environmental premium products that use its core technologies, such as inverter, heat pump and R32.

"In the residential market, we will establish the overwhelming number one position, while accelerating collaboration between two North American air conditioning companies, Daikin Comfort Technologies North America, Inc (DNA) and Daikin Applied Americas Inc (DAA)," explained Hiroaki Ueda. "We have set a sales target of JPY1.5 trillion [$10.7bn] for FY2025 in order to be number one in North America by 2025. We would also like to further expand this commercial business by accelerating the collaboration between DNA and DAA and proposing a system that combines both companies’ commercial products, VRV and applied control."

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