Thailand proves a hot competitor with AC exports worth a cool THB203 bn

The figure increased by 25 per cent from 2020.

This year, Thailand exported more than 164 billion baht worth of air conditioners in the first eight months, an increase of 21 per cent from the same period last year.

The growth in exports reflects how the industry can cope as manufacturers face several problems.

In an interview with business news agency Thansettakij, Supanee Chantasasawat, president of the FTI’s Air-Conditioning and Refrigeration Club, said the export market is likely to grow now that the Covid-19 situation has eased and demand is recovering, especially from countries such as Vietnam and Indonesia.

At the height of the Covid crisis, domestic sales decreased but orders from foreign countries were continuous, so the industry was affected only slightly, Supanee said.

She expects more air conditioners will be manufactured in 2022 compared to the previous year as domestic demand rises, but high fuel and natural gas prices as well as chip shortages are affecting manufacturing costs.

Supanee believes hotter, longer summers around the world, especially in cold climate countries, will provide Thailand with increasing opportunities to export air conditioners and parts.

Furthermore, trade barriers between the US and China and the expansion of middle classes in hot nations including neighbouring countries and Asean might be a supporting factor for Thai exports, she felt.

According to Supanee, the industry is developing better products and parts that utilise smart technology, save energy and are environmentally friendly, so this would be an advantage when competing with other exporters in quality and price.

The top five countries Thailand exported air conditioners and parts to in the first eight months of 2022 were the United States, Australia, Vietnam, Taiwan and Japan, respectively.

China is still Thailand’s main competitor, but Vietnam is an up-and-coming rival with cheaper wages and more available workers, so foreign manufacturers such as Japan have invested in Vietnam since 2018, she pointed out.

In 2023, the Ukraine-Russia war, volatile currencies, high manufacturing costs, chip shortages and trade barriers will pose challenges, Supanee warned.

Thailand still needs to import parts and materials from foreign countries so it might lose its competitive edge, she explained.

She wanted the government to support material and parts manufacturers in technology to compete in global markets amid the current Covid-19 situation and currency problems, expecting political tension and currency woes to take “around 1-2 years to ease”.

The industry must prepare for changes in the future as it relies mainly on exports, she added.