World AC Market – 2022 Update – AFRICA

2023-09-20 11:56

The African Development Bank (ADB) report has pointed out that in the current context, the African continent’s gross domestic product (GDP) will resume a 3.4% growth rate in 2021.

The African room air conditioner (RAC) market in 2021 was a bright spot, with 3.1% growth and sales reaching 3.44 million units. With the exception of Angola and Libya which declined, all other markets increased. RAC market in Africa is divided into two major markets, Northern Africa, including Egypt and Algeria, and Southern Africa, i.e., the rest of the continent. The total number of units sold in Northern Africa reached 1.51 million units, and the total number of units in the rest of the African market was about 1.93 million units.

The largest market in Africa is Egypt, followed by Nigeria, while Algeria slots in third, and South Africa is fourth.

In 2021, most countries in Africa strengthened trade protection measures, and some countries have increased their import tax rates on air conditioners to more than 40%. Many African countries have begun to import products on a complete knock-down (CKD) or semi-knockdown (SKD) basis from China and assemble them in their own countries. Therefore, the number of air conditioners produced locally in Africa has dramatically increased. On the contrary, the number of complete air conditioners exported from China to Africa is dropping significantly.

Market Features
In Africa, sales channels for air conditioners are relatively traditional. Single-split and multi-split air conditioners are sold via professional channels.

Chinese manufacturers mainly sell their products through local dealers and traders under their own brands or as original equipment manufacturing (OEM) products. An increasing number of local distributors assemble air conditioners using parts procured from China.

Japanese manufacturers have fallen behind their South Korean and Chinese counterparts in the market. Japanese brands are promoting midend products in Africa, but the local market is more focused on low-end products, so Japanese manufacturers are having a hard time achieving profitability amid the intense price wars. To gain ground, Japanese manufacturers first developed the market in South Africa and have recently expanded into the north of the continent.

Daikin is envisaging using its factory in India to enter the African market. The company has set up a product development team in India and produces and exports products from there. Daikin has an office in Nairobi, Kenya, which opened in March 2019 and is staffed with employees from India to promote sales in East Africa, while its existing sales subsidiary Daikin Middle East and Africa (Daikin MEA) in Dubai, the UAE, covers the remaining areas in Africa.

Product Features
In the African RAC market, ductless split units have become mainstream in recent years and have collared nearly 90% of the market. This trend reflects the fact that the price difference with window units is slight, and also shows that split units are more adaptable to various requirements.

Africa has a scorching climate, but heat pump systems are used in certain cooler regions during winter. So, the capacity range of the split type covers between 9,000 to 24,000 BTU/h (2.6 to 7.0 kW) focusing on 12,000 to 18,000 BTU/h (3.5 to 5.3 kW).

Heat pump air conditioners accounted for one-third of all air conditioners sold in Northern Africa. Countries in Central Africa mainly use cooling-only air conditioners.
Local markets have been filled with made-in-China RACs, which are dominated by non-inverter models with the exception of South Africa.

There seem to be too many brands in Africa. With the exception of the South African market with several major brands such as Carrier, YORK, Daikin, LG, and Samsung, OEM brands or Chinese brands tend to dominate the African market.

In the African RAC market, South Korean manufacturers such as LG and Samsung entered early and maintain leading positions. They started to sell their RACs together with their home electronics, gaining high recognition and popularity. Then Chinese brands such as Gree, Hisense, Kelon, Midea, TCL, and AUX explored the market with their competitively priced RACs. Japanese manufacturers found it difficult to compete in a low-price residential segment and have shifted their focus to the commercial segment.

Initially, R22 models were the most common types in Africa, while the RAC and PAC markets in South Africa and Algeria have already shifted to R410A.

In the spring of 2018, Daikin launched R32 split-type RACs imported from its Indian factory in the African market. However, no other major brands have followed so far. In addition, local Algerian brands are importing a full set of components and parts for local assembly of wall-mounted split-type RACs using not only R410A but also R32 refrigerant from China, because imports of finished products of such models are prohibited in Algeria.

A new report, which is authored by the Collaborative Labeling and Appliance Standards Program (CLASP) and the Institute for Governance and Sustainable Development (IGSD), finds that about 35% of the RACs sold in Africa have energy efficiency ratings of less than 3.0 W/ W and use obsolete R22 and R410A refrigerants scheduled for phase-out and phase-down respectively under the Montreal Protocol on Substances that Deplete the Ozone Layer. IGSD introduces that the new CLASP/ IGSD analysis of 10 countries – Algeria, Egypt, Ethiopia, Ghana, Kenya, Morocco, Nigeria, South Africa, Tanzania, and Tunisia – takes into consideration more than 95% of the African continent’s RAC market. IGSD has partnered with the Ghana Energy Commission to apply legal tools consistent with international trade law to stop the environmental dumping of new and used obsolete and inefficient appliances. IGSD has also worked with AMEE, Moroccan Agency for Energy Efficiency, and BMCE Bank of Africa Group to demonstrate the opportunity to replace older government-owned air conditioners in Morocco.


Egypt is one of the largest markets in Africa, with a market size of close to 1 million units, and demand is still increasing.

Egypt’s R AC ma rket sca le reached 960,000 units in 2021. Splittype RACs dominated about 90% of the market. RACs with a capacity of 12,000 BTU/h (3.5 kW) range account for nearly half of split-types.

Egypt is regarded as a stepping stone to the African market thanks to its strategic location close to Africa, the Middle East, southern Europe, and its convenient logistics routes. Therefore, a certain percentage of air conditioners is assumed to be re-exported to neighboring countries. Exports of RACs from China are meager due to high import duty exempted only for EU products. In Africa, only Egypt can mass-produce air conditioners.

Egypt’s implementation of trade protectionism was one of the earliest among African countries. The country has accelerated the speed of localization, and imports of air conditioners have dropped dramatically. Now, many parts, including heat exchangers and electrical controllers, require local products.

Egypt’s import tariffs are very high, but Egypt has bilateral trade agreements with some countries in Northern and Eastern Africa, and products produced in Egypt can quickly enter these countries. Therefore, building a factory in Egypt serves local needs on the one hand and covers neighboring countries on the other.

Due to the unstable policies in Egypt and the low prices, some brands have abandoned this market.


Haier built a factory in Egypt with an annual output of 200,000 units and has established its own sales company. In March 2021, this plant was officially put into production, mainly producing mini-splits and some light commercial air conditioners, including PACs with a capacity of 6 hp or less, etc. The target markets are Northern and Eastern Africa.

Both Hisense and Gree’s factories in Egypt are operated based on partnerships, and are mainly engaged in assembling parts or providing technical guidance and support to local partners.

Carrier and Midea have a joint venture (JV) in Egypt, aiming at selling products designed for the local market. Carrier’s factory in Egypt produces Carrier and Midea brand air conditioners.

Carrier brand products account for 90% of the production and have seen a stable sales volume with a dominant presence in the high-end segment in Central, Eastern, and Northern Africa. The JV has also been developing Midea brand products for several years. Midea plans to expand its existing annual capacity of 500,000 units. These products are supplied to neighboring areas, including Iran, Iraq, Turkey, and the domestic market.

Sharp is a famous brand in the Egyptian RAC market, followed by Carrier, Unionaire, LG, Samsung, Fresh, Craft, and Hisense. Sharp is Japan’s only manufacturer that mass-produces RACs on a knockdown basis in Africa. It does this through a technical collaboration with its leading partner El-Araby in Egypt. El-Araby’s plant serves as a major supply base of Sharp-brand RACs destined for Middle Eastern and African countries.

Daikin Europe (DENV), a wholly-owned subsidiary of Daikin, partnered with BPE Partners, a leading Egyptian private equity firm, to establish Daikin Air-conditioning Egypt (DAEG), which began operations in August 2016. Other Japanese brands teamed up with their Indian partners to explore the African market jointly, including Egypt.

Johnson Controls (JCI) has an exclusive agreement with the Shams Group for the distribution and after-sales service of its YORK RACs. The Shams Group displays YORK products at its showrooms and offers them through its network of dealers. The company has been involved in several high-profile projects in the country.
Electrolux has set up a JV in Egypt.

Egypt has conducted the Efficiency Improvement and Greenhouse Gas Reduction Project (EEIGGR), targeting improved energy efficiency through industry support, standards, and labeling, introducing energy codes for new buildings, and establishing an energy efficiency center. The project involved commercial energy audits, engineer training programs, and public awareness programs.


With rising oil prices, the GDP growth rate in Nigeria is expected to resume growth and reach 1.8% in 2021, then rise to 2.1% in 2022.

The Nigerian air conditioner market size was 840,000 units in 2021. The primary air conditioner brands in Nigeria include Carrier, Chigo, Daikin, Gree, Haier, LG, Midea, Panasonic, Samsung, Trane, and YORK.

Manufacturers such as Haier, Midea, and TCL export their air conditioners from China to Nigeria and regard them as an essential market in Western Africa. Midea mainly promotes its brands in Nigeria.

Despite political instability, the great market potential has prompted Chinese and South Korean companies to set up factories in the country. Nigeria has gradually become a significant air conditioner assembly base. These companies typically sell products produced in Nigeria in the domestic market and export them to Northern and Western African countries, including Morocco.

LG operates an air conditioner factory in Lagos to meet the specific needs of the Nigerian market, such as air conditioners that accommodate unstable electricity voltage, repel mosquitoes, and can be directly connected to generators. Samsung assembles its air conditioners at a factory in Nigeria to avoid the country’s high tariff barriers and exports some of the units assembled there to neighboring countries.

Haier has invested heavily in Africa. The company has set up three of its eight overseas air conditioner production bases in Africa, specifically Algeria, Nigeria, and Tunisia. Haier mainly produces single-splits in these countries, and having these production bases gives it broad market coverage of the surrounding economic regions.

Japanese manufacturers have not yet started local production but are offering their products to the market through distributors. Japanese companies have opened showrooms in the country to promote their products.

Panasonic is mainly developing the Nigerian market in Africa, and sales in the Nigerian market in 2019 were outstanding. Panasonic has a sales office in Nigeria and manages sales in Africa through its Dubai office. Some of the products supplied to the African market are from Malaysian factories; the other products are from Chinese original design manufacturing (ODM).

Mitsubishi Electric operates in the Nigerian market through a French firm.

The two South Korean giants, LG and Samsung, dominate the local market. Both brands have established air conditioner factories in Nigeria. South Korean manufacturers also ship products to Africa from their Asian production bases. Their strong competitiveness in terms of price and performance has earned them market recognition in Africa.

Nigeria launched its energy efficiency label in August 2017, announcing that it would start to be enforced 18 months after its launch (in other words, at the beginning of 2019) as a classic 5-star rating system. This applies to both air conditioners and refrigerators.

The Energy Guide Label, a seal indicating the energy consumed by air conditioners, lamps, and refrigerators has been launched by the Standards Organisation of Nigeria (SON) in collaboration with the Nigerian Energy Support Programme (NESP). The project is funded by the European Union (EU) and the German Government. The label shows the conformity of appliances to the minimum energy performance standard (MEPS) in Nigeria and comprises a rating of appliances indicated by 1 star for less efficient to 5 stars for more efficient appliances. Any air conditioner that is less than a 1-star rating will no longer be allowed into the Nigerian market. The label will be attached to all appliances with approved MEPS. The overarching aim is to reduce greenhouse gas (GHG) emissions through enhanced energy efficiency and the phasedown of higher global warming potential (GWP) refrigerants.

South Africa

The updated version of the World Economic Outlook in July 2021 shows that South Africa’s growth prospects for 2021 have risen from 3.1 to 4%.

South Africa has a savanna climate. From October to February every year, it is summer, and from June to August, it is winter. The drier it is to the west, the more significant the continental climate is. The temperature in South Africa is relatively lower than that in other countries of the same latitude in the southern hemisphere, but the annual average temperature is still generally in the 12 to 23ºC range.

The air conditioner market in South Africa reached around 400,000 units in 2021. All air conditioners are imported from Southeast Asia, India, and China. For the residential market, split-type RACs and packaged terminal air conditioners (PTACs) are mainstream.

Air conditioners are not priority appliances in South Africa, but they have been gaining in popularity among high-income households in recent years, reaching a 40% penetration rate in the most affluent income brackets. In addition, split-type RACs are often used in offices without a centralized heating, ventilation, and air conditioning (HVAC) system. South Africa has enjoyed lower electricity rates than in many other parts of the world. However, sharply higher demand stemming from economic development has challenged the country’s ability to maintain a stable electricity supply and has prompted a series of electricity rate hikes. The government moved to introduce MEPS for home appliances to reduce electricity consumption early on. Split-type RACs are purchased mainly by high-income households, which are very interested in conserving energy. This has helped boost the proportion of inverter units to more than 70% of split-type RACs.

In South Africa, most air conditioners are sold via professional channels. Due to relatively high installation requirements, there are many local distributors in the country. Portable-type air conditioners sell well in supermarkets such as Walmart and Game, thanks to their easy installation.

Asian manufacturers have grown their RAC sales in South Africa by setting up sales companies and working with distributors. RACs are also sold at electronics retailers, department stores, and general merchandise stores.

The main RAC markets in the country are Durban and Cape Town. LG and Samsung dominate these markets. Samsung has increased its focus on South Africa, where it changed the name of its Air Conditioning Division to Digital Air Solutions. Samsung’s strategy is to broaden its user base in both the residential and commercial markets to include cooling and heating, and air modification with an emphasis on advanced technologies. Japanese manufacturers also enjoy brand recognition in the market. Panasonic South Africa has opened a new office and showroom in Cape Town. The theme of the showroom is ‘Life Experience Center.’ The aim is to enable Panasonic to listen to customers and develop new products for the South African market.

Mitsubishi Electric Europe has opened an office in Johannesburg. Starting operations in June 2015, the branch focuses on market research and business development to bolster the company’s business offerings, mainly in the sub-Saharan region.
Daikin has also had a sales subsidiary in South Africa since 1998.

Chinese investment in largescale projects in South Africa has been increasing. This brings a lot of opportunities to Chinese air conditioner enterprises. Hisense promotes its products and operates exclusive stores that carry its brand. Hisense set up a plant in South Africa to produce TVs and refrigerators. This plant has the potential to make air conditioners.

Midea has been successful in adopting online promotions in South Africa.

In addition to Asian manufacturers, some European brands also gained a particular market share in South Africa but with a relatively weak presence. Egypt-based Unionaire has an office in South Africa and offers clients comprehensive customer service.

MEPS for air conditioning and refrigeration (AC&R), among other product lines, came into effect in 2016 and 2017, respectively. Proposed new MEPS is being discussed, and applied to commercial refrigerators and chillers, among other items.

Consultative Workshop on the Introduction of new MEPS for Residential and Commercial Electrical Appliances and Equipment was held in April 2019. National Standard 941, which addresses the energy efficiency of residential appliances, was made mandatory through the introduction of VC 9006 and VC 9008. Referred to as Standards and Labelling (S&L), the program gives effect to national policy relating to efficient energy usage which is in line with the country’s international pledges and obligations to reduce its GHG emissions.


In early September, high and sometimes record temperatures were experienced in Northern African countries such as Algeria, reaching 50ºC in some areas.

The hot weather has boosted local air conditioning sales. According to JARN estimates, Algeria’s demand for air conditioners reached more than 600,000 units in 2021.
In 2021, the Algerian government imposed restrictions on imports to ensure the country’s import and export trade balance.

Because the pandemic has caused an economic downturn, the government needs foreign investment to promote the development of the country’s economy and create more job opportunities. There will be more and more protected markets in Africa, which will be a big blow to China’s exports.

In the Algerian market, Condor is the top leading brand. Midea was slated to enter the top four in 2021.

The current market capacity in Libya is almost 300,000 units.

The civil war destroyed homes along with the air conditioning market. However, if the conflict ceases, the market will soon recover. The actual demand in the residential segment is about 800,000 units.

Hommer now ranks first in the Libyan air conditioning market, and the distributor mainly purchases goods from Gree.

The Angolan market represented 200,000 units, and the decline in 2021 is estimated to have been significant. Affected by the increasing severity of local trade protection, Angola has also begun to import large quantities of products on a CKD and SKD basis from China. Midea is deploying a targeted strategy in Angola and has obtained some government projects.