In contrast to last year, when local demand for air-conditioners dropped dramatically almost 10 per cent, because of consumers' lower spending power, the outlook for this year is optimistic. Major players have allocated hundreds of millions of baht for aggressive marketing and advertising, in order to boost their share in the market.

Surichai Patarakitnirun, managing director for Thailand and Indochina for US-based Trane Thailand, said total demand for residential air-conditioners was projected to grow 5-10 per cent to 800,000 units this year, or Bt20 billion in terms of sales value.

"The hot weather hit Thailand a couple of weeks earlier than last year," said Surichai, adding that despite the ongoing economic and political difficulty, the early hot weather was driving demand.

"We don't think our projected sales will see any growth this year, due to the slow-down in real-estate projects," said Surichai. "We've shifted our focus to promoting relations with our 250 dealers, which will sell our Trane products to individual customers."

Sittisak Phanitphojama is marketing and business development manager at US-based Johnson Control International (Thailand), manufacturer of York air-conditioners. He said there was strong demand for air-conditioners in Thailand, despite a fall in the overall economic growth rate, because of the hot weather conditions. Meanwhile, most new houses - an average of 50,000-60,000 units a year - need air-conditioning; hence, the company believes it can meet its sales target of 20-per-cent growth this year.

He said his company's air-conditioner sales reached Bt4.9 billion last year, of which Bt2.5 billion came from exports, Bt800 million from sales to residences and Bt1.2 billion from sales to commercial entities. Sittisak said the company had allotted a Bt30-million marketing budget for its call centre, in order to improve after-sales service.

LG Electronics (Thailand), the local arm of the South Korean electronics manufacturer, will invest Bt300 million to boost its air-conditioner production capacity from 1 million units to 1.5 million this year.

The move is part of a strategy to increase air-conditioner sales to Bt2.6 billion this year. The company has also set a marketing budget of Bt500 million, said Chartchai Pisutburibont, director for air-conditioner sales.

He said that after expanding its capacity, the Thai facility would rank third among LG's eight air-conditioner plants around the world. The parent company has also selected Thailand for its Southeast Asian research and development (R&D) centre. When construction is complete this year, the R&D centre will be the company's third, following ones in South Korea and China.

Chartchai said the company expected to be the market leader in the Thai air-conditioner market by 2010. With an 18-per-cent share, LG now ranks second behind the current market leader's 24 per cent.

Anun Bunjerdtum is general manager for marketing and sales at Mitsubishi Electric Kangyong Watana, local distributor for Mitsubishi air-conditioners. He said the brand was near the top of Thailand's 520,000-unit air-conditioner market.

The company's marketing and advertising budget is Bt700 million this year, up from Bt650 million last year, with 40 per cent earmarked for air-conditioners.

Kwanchai Rungfapaisarn

The Nation