High temperatures will be a key factor nudging people to buy new air conditioners or opting for maintenance on their existing appliances, with the Thai market expected to grow by 30% this year, according to TCL Electronics, a Chinese manufacturer of consumer electronics.
"Even though the rainy season has started, the weather is still quite hot. This is likely to drive the country's air conditioner industry," said Geerachai Saksangawong, sales director for air conditioners at TCL Electronics (Thailand).
From May to July, the average nationwide temperature is expected to be 1°C higher than the historical average, with a mean maximum temperature in Upper Thailand ranging from 34-36°C, according to the Thai Meteorological Department.
Moreover, the Electricity Generating Authority of Thailand has issued a new No.5 energy-saving label with stars to conserve more energy and reduce carbon emissions, expanding the options for buying energy-efficient products, Mr Geerachai said.
He said this new sticker may tempt consumers with old air conditioners to upgrade, in a bid to save on electricity bills.
While there are supporting factors this year, Thailand has elevated levels of household debt.
Thailand's household debt-to-GDP ratio was 91.3% in the fourth quarter of 2023, according to the National Economic and Social Development Council.
"High household debt will inevitably affect customer purchasing power as well as the air conditioner industry, but with the scorching heat, people might allocate their budget to buy an air conditioner," Mr Geerachai said.
TCL Electronics is partnering with financial institutions, including distribution channels, to organise promotions such as instalment payments, he said.
He said the air conditioner market in Thailand was valued at 28 billion baht last year, and in the first quarter of 2024, the market grew by around 20% in value.
The air conditioner market faces rising costs as prices for copper, aluminium and sea freight all increase, which is likely to make manufacturers eager to avoid price war campaigns, said Mr Geerachai.
With the headwinds from sweltering heat and people opting for new air conditioners, the company believes Thailand's air conditioner market will expand by up to 30% this year, he said.
He also revealed that the company plans to build a new air conditioner factory in Thailand to supply both the local and international markets.
Mr Geerachai said the company's air conditioner sales amounted to around 1.6 billion baht last year.
This year, the company aims to increase air conditioner sales to 3 billion baht, driven by the launch of new products by focusing on home appliances, and the expansion of sales distribution.
