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BSRIA spies massive opportunities in China

HVAC firms seeking to expand into the Chinese market can look forward to high growth rates but they must be prepared to fight for them.

Speaking to H&V News, Chris Marney, BSRIA Worldwide Market Intelligence operations manager, advised UK companies to formulate a strategy based on patience, market knowledge and partnering if they wished to unlock the potential inside China. 


“HVAC markets in China are very competitive with huge numbers of suppliers,” Mr Marney said. “Foreign companies [often] look for some joint venture or OEM deal in order to gain entry into the Chinese market, or indeed to obtain a cheap production base which can be used for the region. Those companies succeeding in China have done so through considerable investment over a number of years.


“Some European brands have significant market presence for heating, through either imports or their own local production. Chinese market growth rates are very high and future growth is expected in the next few years but European manufacturers will only be able to compete in certain sectors,” he warned.


“Air-conditioning is dominated by Chinese, Japanese and Korean brands at the smaller end and by US brands for larger equipment.”


The comments were made on the back of the announcement that BSRIA had opened a subsidiary office in Beijing. Mr Marney said the venture was in direct response to the high demand for his company’s data on the region.


“We’ve had a lot of requests to carry out work in China, both from Chinese companies and companies outside China. Although we can and have done work in the past [from our UK office], we’ve found that Chinese firms would rather operate with someone in their own time-zone. We also have a large number of Chinese clients.”


Mr Marney added: “There is a huge amount of interest in the Chinese market, which is one of the reasons for us conducting research there. Having a Chinese office [puts us in a strong position] to expand on our existing business.”


BSRIA said the China subsidiary would provide research on its usual core products – air-conditioning, heating, boilers, water heaters, renewables (heat pumps, solar thermal) bathrooms and structured cabling building controls. Geographically, BSRIA’s focus would be on China and South Korea.


China is said to be one of the world’s leading polluters and one of the most acute potential sufferers of the effects of climate change. Analysts expect demand for environmentally-responsible products to surge, and believe the Chinese HVAC market will increase 40 per cent by the end of 2010, becoming one of the largest markets in the world.