The record-breaking heatwave striking Europe is bringing a special boom to South Korean, Chinese, and Japanese air conditioner companies. While the demand for portable products is exploding in the European market where the air conditioner penetration rate is a mere 20%, the restructuring into a heating, ventilation, and air conditioning (HVAC) market centered on heat pumps is expected to accelerate in the long term.
Samsung Electronics Co., Ltd. (Samsung Electronics) and LG Electronics Inc. (LG Electronics) are recording remarkable growth trends in the European air conditioner market in the first half of the year. Samsung Electronics achieved double-digit revenue growth in major markets such as Italy, Spain, and France. As temperatures are expected to rise after June, the company anticipates that demand during the peak cooling season will persist.
LG Electronics' domestic air conditioner revenue grew by double digits in Western Europe in June. The company depleted its inventory of portable air conditioners destined for Europe early in the second quarter. The Changwon production line, which manufactures a significant portion of European-bound products, has been operating at maximum capacity since April. It is understood that its local manufacturing lines in Europe, including Turkey, are also raising their operation rates.
Chinese companies are also increasing their market share by putting forward price competitiveness. Midea Group Co., Ltd.'s (Midea) portable air conditioner 'PortaSplit' was completely sold out in some distribution channels, and a phenomenon even emerged where the secondhand trading price exceeded the price of a new product. Its revenue in German e-commerce channels increased by 37% year-on-year as of May, and shipments to Spain and France surged by 108%.
Japan's Mitsubishi Electric Corporation is also preparing measures to handle the sharply surging product demand, which is centered in France, Spain, the United Kingdom, and Germany.
The European air conditioner market possesses highly distinct regional characteristics. According to the International Energy Agency (IEA), the air conditioner penetration rate in Europe is approximately 20%, falling heavily short of the United States (90%). Because the criteria for installing outdoor units are extremely strict, demand for window and portable products that do not require outdoor units in the short term concentrates during temporary heatwaves.
A home appliance industry official said, “In Paris, France, one must go through nine steps to receive a permit to install an outdoor unit,” and added, “Because of this structure, a special boom centered on certain portable products is expected in the short term, but we will have to wait and see whether this situation will persist.”
In the long term, the center of gravity is expected to shift toward the HVAC market centered on newly built large complexes and structures. Analysts state that as heatwaves repeat, the demand for permanent cooling solutions will grow, and the heat pump market, which resolves cooling and heating simultaneously as part of a building system, inevitably has to grow. According to the World Meteorological Organization (WMO), warming in Europe is progressing at more than twice the global average speed.
The European heat pump market is anticipated to become a fierce battlefield between South Korean and Chinese corporations. Samsung Electronics and LG Electronics are putting weight behind targeting the European heat pump market by putting forward their 'Eco Heating System (EHS)' and 'Therma V' brands, respectively.
Chinese companies are also chasing aggressively. Midea, Gree Electric Appliances, Inc., and Haier Group Corporation are rapidly expanding their market shares in the Eastern and Southern European HVAC markets using prices that are 20% to 30% lower than those of South Korean companies as a weapon.
According to the European Heat Pump Association (EHPA), the sales volume of residential heat pumps in 16 European countries last year was approximately 2.62 million units, an increase of 10.3% year-on-year, overcoming the declining trend caused by the reduction of subsidies in 2024.
An industry official stated, “Portable air conditioners may end up as a short-term special boom, but heat pumps represent a structural market that will grow for more than 10 years in tandem with Europe's carbon neutrality policies,” and added, “The price and technology competition between South Korean and Chinese corporations will begin in earnest.”
