In a statement last week the company said it was a response to the sudden change in foreign exchange rates, the decrease in the sale of air conditioners worldwide and a loss caused by the reevaluation of its investment securities.
Yukiyoshi Okano, company president, told Reuters: 'Under the current difficult economic climate, we are tackling a plan to slash capital spending, reduce output and lower inventories so that we can generate the funds necessary for future mergers and acquisitions and share buybacks.'
Mr Okano said Daikin is looking at various possible targets for mergers and acquisitions including heating businesses in Europe and duct pipe companies in the United States.
He said despite the decline in demand for domestic air conditioning, Daikin’s heat pump products were performing above target in Europe and demand for large scale air conditioning was strong in the United States.
He said he believed demand for air conditioning would recover strongly by around 2010.