Europe's heatwave sparks rush for Chinese air conditioners

Record-breaking heat across Europe in the final weeks of June has triggered a sharp increase in demand for portable air conditioners, providing a significant boost to leading Chinese appliance manufacturers as consumers seek fast and affordable cooling solutions, Bloomberg reports.

As temperatures climbed to uncomfortable levels indoors, many Europeans turned to portable air conditioning units, which can be installed quickly and are generally less expensive than the split inverter systems commonly used in the United States and Asia.

The surge in demand is expected to benefit major Chinese manufacturers, including Midea Group Co., Haier Smart Home Co., and Gree Electric Appliances Inc.

Morningstar analyst Jeff Zhang said he expects robust demand for window-mounted and portable air conditioners to drive year-on-year export sales growth for major Chinese manufacturers during the summer months, forecasting a "meaningful" boost to second- and third-quarter revenues.

According to Citigroup, Foshan-based Midea could record more than 20% year-on-year growth in European consumer air-conditioner sales during the second quarter. The company anticipated stronger seasonal demand by building inventories of portable split air conditioners to two to three times last year's levels ahead of the summer peak, analysts led by Xiaopo Wei said in a research note.

Citigroup also expects Haier Smart Home to achieve double-digit growth in its European air-conditioning business this year. The segment accounted for an estimated 20% of the company's regional revenue in 2025. Overseas sales represent around 15% of total revenue for Gree Electric Appliances, according to the bank.

Despite the positive outlook in Europe, analysts caution that stronger export demand is unlikely to fully compensate for weaker sales in China, which remains the industry's largest market.

Bloomberg Intelligence analyst Elaine Lai noted that Chinese appliance makers continue to face headwinds from sluggish domestic consumer demand, reduced government subsidies and rising raw-material costs. She added that higher prices for aluminum and copper could squeeze profit margins and limit earnings gains.

According to data from the International Energy Agency, only around 20% of European households currently have air conditioning, leaving considerable room for future market growth. Zhang said the convenience, affordability and ease of installation offered by Chinese portable units would provide manufacturers with long-term structural advantages, adding that the trend "may become recurring if global warming persists."

By Vafa Guliyeva