Daikin AC to Expand in India: World’s Top Air Conditioner Maker Sees Huge Growth Potential

Daikin Industries Ltd., the world’s largest air conditioner manufacturer, is planning to expand its presence in India to meet the growing demand for cooling as temperatures rise. The Japanese company has signed an agreement to acquire an additional 33 acres of land near its existing plant in southern India. This expansion will allow Daikin to build a new factory to increase its production capacity.

Kanwal Jeet Jawa, CEO of Daikin’s India operations, highlighted the huge market potential, stating, “About 93% of people in India still don’t own air conditioners, which presents a future market for us.”

This year, India experienced record-high temperatures, affecting health, agriculture, and the economy. With a rapidly growing middle class, India is set to become the world’s second-largest market for air conditioners, overtaking the US and just behind China by 2036, according to the International Energy Agency.

Daikin has already seen significant growth in India, selling about 700,000 units in the first quarter of this year, a 40% increase in local-currency sales compared to the same period last year. The company expects its sales in India to double by 2025 from 2021 levels.

Jawa is optimistic about expanding beyond Daikin’s current three plants in India, where the residential air-conditioning market is expected to triple to around 30 million units by 2030. Daikin also aims to boost production in India to support its goal of exporting air conditioners to 100 countries across Africa, the Middle East, and South America by March 2026.

The growth in India’s air conditioning market is also driven by easier access to products through online shopping and flexible payment options. Consumers in India are now looking for value rather than just low prices, according to Jawa.

Since starting production in India in 2009, Daikin has become a leading player in both the commercial and residential air-conditioning markets, with competitors like Tata Group’s Voltas Ltd. and South Korea’s LG Electronics Inc. in the residential sector.

In addition to air conditioners, Daikin plans to expand its commercial refrigeration business in India, leveraging the increased demand for frozen foods since the Covid-19 pandemic. Jawa expects this business to grow to around 10 billion rupees ($119.1 million) a year by 2030. Daikin’s customers in this sector include food delivery company Blink Commerce Pvt.

“Refrigeration is at a stage today similar to where air conditioning was 30 years ago,” Jawa explained.