As Europe roasts in a heat wave, Asia's air-con makers grab some cool cash
Seeking respite from the sizzling weather, people and companies across Europe are snapping up portable and fixed air conditioners as some countries warn the heatwave could intensify.
As Europe sweats through record-breaking temperatures, Asian makers of air conditioners, like South Korea's Samsung Electronics (005930.KS), China's Midea and Japan's Mitsubishi Electric (6503.T), are enjoying a boom in sales.
Air conditioning is common throughout buildings, transport and homes in major cities across Asia, but it is rare in Europe and people are struggling to stay cool as searing heat claims lives, disrupts power supplies and shuts schools.
Seeking respite from the sizzling weather, people and companies across Europe are snapping up portable and fixed air conditioners as some countries warn the heatwave could intensify.
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"With temperatures expected to rise further from June onward, we expect sustained demand through the peak cooling season," said Samsung Electronics (005930.KS), in a statement to Reuters. Key markets, including Italy, Spain and France, generated double-digit sales growth in the first half of this year, it added.
Rival LG Electronics (066570.KS), said air-conditioner production lines at one of its facilities in South Korea had been operating at full capacity since April ahead of "seasonal summer demand across Korea and global markets."
It is a similar story for China's Midea (000333.SZ), which has experienced soaring demand for its PortaSplit air conditioner that the company says has had such strong orders that second-hand prices have exceeded the cost of new units.
"A heatwave in the final two weeks of May significantly boosted sales, particularly for the PortaSplit air conditioner, which sold out in some channels," Midea said.
EUROPEAN TRENDS
Sales through German e-commerce channels rose about 37% in May from a year earlier, while shipments in Spain and France jumped 108% from a year earlier, it added.
The massive demand for cooling devices underscores the shift in European consumer behaviour as countries grapple with profound climate changes.
In Europe, older buildings can, however, make air-conditioner installation costly and complicated, often requiring lengthy wait times for fitting.
Midea said the cost of installing an air conditioner in Europe could cost more than €1,000 ($1,137), putting it out of reach for many households.
According to the International Energy Agency, total ownership of air conditioning units in Europe stands at around 20%.
As temperatures soar, countries with well-known air-con brands like China, Japan and South Korea are certain to benefit. The searing heat has made life, especially for the elderly and those with chronic disease, hard to bear as they struggle to stay cool.
Companies have also adopted measures to help protect workers, including equipping delivery staff with "cool boxes" containing reusable cooling towels, water-activated wrist coolers and UV-protective neck guards.
Japan's Mitsubishi Electric (6503.T), said it, too, was seeing a surge in demand for air-conditioning units from Europe, which the World Meteorological Organization has said is warming at more than twice the global average.
"In Europe, sales of air conditioners have been strong, particularly in France, Spain, the UK, and Germany, which were hit by heat waves," the company told Reuters.
