European heat wave brings in cool cash for Asian air-conditioner makers as sales surge

Europe's sweltering heat wave is proving to be a boon for Asian air conditioner makers, who are reporting a surge in sales as the continent grapples with unprecedented temperatures. Companies such as South Korea's Samsung Electronics, China's Midea, and Japan's Mitsubishi Electric are seeing a significant uptick in demand.

Unlike in Asia, where air conditioning is a common feature in homes and public spaces, it remains a rarity in many European countries. As searing heat claims lives and disrupts daily life, Europeans are desperately seeking relief by purchasing portable and fixed air conditioning units. Some nations have even warned that the heat wave could intensify, further fueling the demand.

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

Samsung Electronics noted sustained demand through the peak cooling season, with key markets like Italy, Spain, and France experiencing double-digit sales growth in the first half of the year. LG Electronics reported its South Korean production lines have been operating at full capacity since April to meet anticipated demand. China's Midea highlighted a particularly strong demand for its PortaSplit air conditioner, with second-hand prices even exceeding new unit costs in some instances.

This massive demand underscores a shift in European consumer behavior driven by climate change. However, the installation of air conditioners in older European buildings can be costly and complex, potentially putting them out of reach for many households. The International Energy Agency estimates that only about 20 percent of European homes currently have air conditioning units. As temperatures continue to soar, countries with established air conditioning brands, like China, Japan, and South Korea, are well-positioned to benefit from this trend.

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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.