Higher purchasing power expected to heat up air-con sales

Sales of air-conditioners are expected to increase significantly this year, driven by the government's populist schemes, including the higher minimum wage and the increased salaries of civil servants, which have raised people's purchasing power.

Alongkorn Chujit, deputy managing director of LG Electronics (Thailand), said the demand for air-conditioners had increased by double digits in each of the past few years because of hotter weather.

He said the company had invested in increasing the manufacturing capacity of its air-conditioner plant in Rayong province from 1 million units per annum to 1.2 million. The expansion is to serve increasing demand both domestically and overseas. About 80 per cent of the production is for export and 20 per cent for the domestic market. The significant growth will be for inverter models, which account about 10 per cent of the overall air-conditioner market.

LG has also set aside a Bt300-million marketing budget for the launch of a new air-conditioner model, Artcool Inverter V, whose retail price will start at Bt27,900, as well as five other models: Inverter V Plasmaster, Inverter V, Art Cool, Deluxe-Plasmaster, and Eco Plus.

"We expect our total sales to increase by about 15 per cent to Bt25 billion, of which Bt3.6 billion will from air-conditioner products, which will be up 20 per cent over last year," Alongkorn said.

Inverter air-conditioners control the speed of the compressor motor to allow continuously regulated temperature, which increases efficiency. LG currently has 16 per cent of the inverter segment of the local market. It expects to increase that to 24 per cent this year and become the No 1 player in the segment. It is also in second place in the overall air-conditioner market in Thailand with an 18-per-cent share.

Meanwhile, Mitsubishi Electric Kang Yong Watana predicted that the overall home-air-conditioner market would increase by about 5 per cent in volume this year. Meanwhile, sales of commercial air-conditioners are expected to grow by less than 5 per cent. The company has targeted sales of Bt12 billion this year, of which 58 per cent would from home air-conditioners, 8 per cent from commercial air-conditioners, 17 per cent from refrigerators, 6 per cent from electric fans, 2 per cent from ventilators, and 8 per cent from water pumps.

Saowanee Sirariyakul, senior manager for home appliance at Thai Samsung Electronics, said it would gradually launch new innovative air-conditioner products, especially inverter models. The company recently launched a Wi-Fi-enabled inverter model. About 20 air-conditioner models will be introduced this year.