IN ADDITION to being the largest producer of heating, ventilating and air conditioning products in the world, China is now also the largest market for hvac, a new report claims.
The top three Chinese manufacturers, Haier, Midea and Gree, can supply 50% of the world's demand for HVAC products, according to the report by Frost & Sullivan.

Driven by a boom in China's commercial property, high-end real estate and energy saving policies, it is estimated that China's HVAC market was £5bn in 2011, a 20% increase on 2010. With an annual growth rate of 20%, it is predicted that the total market size will reach £11bn in 2015.

Far eastern manufacturers Daikin, Hitachi, Toshiba and Samsung took the largest market share (32%) in 2011. Western companies York, Carrier, Trane, Mcquay and Dunham-Bush had 23% of total market size. Domestic brands Haier, Gree and Midea accounted for 22% of the market.

Chinese government electronics subsidies fuelled a double digit growth in room air conditioners between 2009 and 2011, but with the programme ending this year, exports declining, raw materials increasing and over production, the market is predicted to decline.

China's biggest room AC manufacturers, Midea, Haier and Gree, were trapped by huge inventory backlog in 2011. Latest statistics quoted by Frost & Sullivan show that the inventory backlog was over 20 million units by the end of 2011. As a result, to solve the problem of liquidity, most manufacturers began to lay off staff to save operational cash flow. An extreme example indicates that Midea laid off 50% of its sales staff nationally by the end of 2011.