[Japan], October 30: Prices of household air conditioners in Japan are expected to rise sharply as major appliance makers adapt to new energy efficiency standards and face higher raw material costs due to the war in the Middle East.
Daikin Industries Ltd, the largest player in the industry, plans to raise prices by around 20 to 30 percent for products to be launched in March that meet the new standards. The move has raised concerns that record demand for cheaper older models could be followed by a downturn.
Current models for rooms just over 9 square meters cost between 120,000 yen and 180,000 yen at major Tokyo retailers, with prices expected to rise by roughly 20,000 yen to 50,000 yen.
Meeting stricter energy efficiency standards set to take effect in spring will require larger heat exchangers and higher-performing compressors, among other upgrades. While these changes will increase consumers' upfront costs, they will also lower monthly electricity bills.
Rising prices for raw materials, including naphtha, aluminum and copper, due to worsening tensions in the Middle East will also push up prices of premium models already compliant with the newstandards.
Bosch Home Comfort Japan Inc, which sells Hitachi-branded air conditioners, will raise prices by about 10,000 yen, while Toshiba Lifestyle Products & Services Corp will increase its prices by 10,000 yen to 40,000 yen this month.
Domestic shipments of household air conditioners rose 22.5 percent from a year earlier to 9.86 million units in January-September this year, according to the Japan Electrical Manufacturers' Association.
Advance purchases ahead of price increases, warmer weather in early spring and local government subsidies helped drive the growth, but concerns remain about a subsequent decline in demand starting next year.
A Mitsubishi Electric Corp executive said that while domestic demand this year is expected to reach about 11 million units, it could fall by 2 million to 3 million units next year.
Source: Qatar Tribune