A file photograph shows employees working on the production line for air conditioners at a Daikin plant. (Photo: Getty Images)
Osaka-headquartered Daikin Industries, Ltd. has unveiled a plan to build a production facility for household air conditioners in Vietnam amid rising demand for home appliances in the Southeast Asian country and maturing markets at home, according to Nikkei.
The plant is expected to cost more than 10 billion yen ($93.6 million) and will be located in an industrial zone on the outskirts of Hanoi
It will come into operation in 2018 with annual capacity of around 500,000 units. The capacity will double to roughly one million units by 2020, depending on demand.
Daikin has been importing air conditioners to Vietnam, mainly those fabricated by the company in Thailand. The Thai production facilities have operated at full capacity since fall 2015 due to rising demand from Vietnam and other markets. But supplies have failed to keep pace.
In Vietnam, Daikin is expanding its specialty outlets. The company will also more than double the number of service centers to 30 by fiscal 2020.
With a fast-growing middle class, Vietnam boasts high demand for home appliances, especially made-in-Japan products.
Having a population of about 93 million and a tropical climate, Vietnam is one of the biggest markets for household air conditioners in the Southeast Asian region, estimated at two million units annually. Sales of air conditioners are growing at an average of over 30% per year.
The penetration of air conditioners in Vietnam is just shy of 20%, but the allure of inverter air conditioners is rising along with individual incomes, Nikkei added.