Daikin goes all in on standard AC parts with eye to low-cost China rivals

daikin goes all in on standard ac parts with eye to low cost china rivals

OSAKA — Japan’s Daikin Industries will standardize core components in all of its household air-conditioning units worldwide by 2023, adopting a common practice in the auto industry in order to streamline development and production.

New AC models usually take 12 to 18 months to go from planning to completion. Daikin’s module-based approach will allow the company to combine existing components instead of developing every part from scratch, cutting development time and costs by half or more.

The push is driven in part by growing competition from Chinese makers, which are quickly making inroads in Southeast Asia and Europe. Gree Electric Appliances, for example produces and sells 30 million units a year — three times as many as Daikin.

Daikin plans to standardize 50% to 60% of all household AC parts, including heat exchangers, fans and motors, as part of a base module.

Add-ons, like self-cleaning filters, will be kept separate, so the company can tweak products depending on the local climate or customer demand.

The company currently uses this module approach in about 30% of its models, with plans to expand the figure to about 40% to 50% in 2021, and to all models by 2023.

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