Asia's air conditioner makers profit as Europe roasts in heatwave

As Europe swelters under record-breaking temperatures, Asian manufacturers of air conditioning units are reaping the benefits of a significant sales surge. Companies including South Korea's Samsung Electronics, China's Midea, and Japan's Mitsubishi Electric are reporting booming sales as the continent struggles to cope with the intense heat.

While air conditioning is a standard feature in homes, transport, and buildings across Asia, its prevalence in Europe is considerably lower. The current heatwave, which has claimed lives, disrupted power supplies, and forced school closures, has driven Europeans to seek relief by purchasing portable and fixed air conditioning units. Samsung Electronics noted in a statement to Reuters that "with temperatures expected to rise further from June onward, we expect sustained demand through the peak cooling season." Key markets like Italy, Spain, and France have already seen double-digit sales growth in the first half of the year.

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With temperatures expected to rise further from June onward, we expect sustained demand through the peak cooling season.

LG Electronics, another major player, has its air conditioner production lines in South Korea operating at full capacity since April to meet anticipated seasonal demand globally. Similarly, China's Midea has experienced overwhelming demand for its PortaSplit air conditioner, with second-hand units reportedly selling for more than new ones due to strong orders. Midea reported that "a heatwave in the final two weeks of May significantly boosted sales, particularly for the PortaSplit air conditioner, which sold out in some channels."

Sales data from Europe reflects this trend, with German e-commerce channels showing a roughly 37% increase in May compared to the previous year. Shipments in Spain and France surged by 108% year-on-year. This heightened demand underscores a shift in European consumer behavior as countries grapple with the realities of climate change. However, installing air conditioners in Europe can be challenging and expensive, especially in older buildings, often leading to long wait times and costs exceeding $1,137 for Midea units, placing them out of reach for many households. The International Energy Agency estimates that only about 20% of European homes currently own air conditioning units.

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A heatwave in the final two weeks of May significantly boosted sales, particularly for the PortaSplit air conditioner, which sold out in some channels.