01 Market opportunities for Chinese air conditioners to enter Europe
> Current status of air conditioning penetration rate in Europe
In terms of the current state of air conditioning penetration in Europe, the Washington Post recently disclosed that the installation rate of air conditioners in French and British households is less than 5%, and in Germany, the proportion is as low as 3%. This is mainly related to the maritime climate in many parts of Europe. However, the report also cites data from the International Energy Agency, which shows that air conditioning in Italy, Spain, Greece and southern France has grown rapidly over the past decade. The number of air conditioners in EU countries is expected to surge to 275 million units by 2050, up from 110 million units in 2019.
In order to delve deeper into the reasons behind the low penetration rate of air conditioners in Europe, the Global Times reporter visited many households in Germany, the United Kingdom and France. Respondents generally reported that in the past, the summer temperature in Europe was relatively mild, the use of air conditioning was not widespread, and high installation costs also suppressed consumer demand.
> Impact of high temperatures on air conditioning demand in Europe
With the frequent occurrence of extreme heat weather in recent years, many European households have begun to install air conditioners, not only because the weather is getting hotter, but also because the demand is growing despite the high cost of installation. The Thibault family in Lyon, France, and the Marcus family in Karlsruhe, Germany, have installed air conditioners to cope with the hot summer weather.
Under the influence of high temperatures, the Tibault family, who live in Lyon, France, installed air conditioning in their country house last year. Thibault's wife, Cheryl, revealed that in Lyon, the cost of buying an air conditioner is about 800 to 1,500 euros, while installing an external unit and an air outlet is about 800 to 1,000 euros.
Similarly, Germany's Marcus said that high costs and environmental awareness are the main reasons why many German households do not choose to install air conditioners. Although he installed an air conditioner in his bedroom this year, he still faced the problem of nearly one month from appointment installation to professional visit.
> The current situation and challenges of China's air conditioners exported to Europe
According to data provided by the China Household Electrical Appliances Association to the Global Times, in the first half of 2022, despite the impact of the epidemic and the resumption of work in overseas factories, China's air conditioner exports to Europe still reached 9.17 million units, although slightly down 0.1% year-on-year, but the export value increased significantly by 18.8% year-on-year. This growth shows a structural adjustment in the market, but the challenges are not small. Jiang Feng, executive chairman of the China Household Electrical Appliances Association, pointed out that although the high temperature weather in Europe has promoted the export of air conditioners in China to a certain extent, the short duration of high temperature weather, high labor costs, as well as energy shortage and lack of consumer confidence in the European market, make it a big challenge to break the export record set by the epidemic last year.
02 Strategies and challenges faced by Chinese air conditioning companies
> Market Challenges
In the EU market, Chinese air conditioning companies mainly export through the "OEM" OEM model, which brings restrictions on improving brand power and product strength. In addition, it is necessary to face challenges such as high labor costs, strict environmental regulations and rising electricity prices in the European market. Chinese air conditioning brands have shown certain competitiveness in the international market, but they still need further brand building and market cultivation to truly gain a foothold.
> Corporate response strategies and suggestions
In order to penetrate the European market, Chinese air conditioning companies need to promote energy-saving air conditioners, improve energy efficiency and apply environmentally friendly refrigerants. At the same time, actively taking advantage of the transportation advantages of the "Belt and Road" and reducing costs is also the key. In addition, cooperation with European distributors and agents should be used to jointly train installation workers, and these measures will help Chinese air conditioning brands achieve greater success in the European market.