Daikin Industries announced that it will invest around $230 million dollars to build a Mexican plant for energy efficient air conditioners in order to supply the US market.

Daikin was defining the location of its new plant in Mexico between Nuevo León y San Luis Potosí, however, the governor of the state of Potosí confirmed that the company decided to enter the state of Bajío and that it will lay its first stone in the next 60 days. to start construction.

The facility would start operations in 2024 and employ 2,000 people. Until a few days ago

The annual capacity of the site will reach about 1.5 million units per year. It will operate in combination with a production center in the Houston area; With this, Daikin will increase its capacity to supply air conditioners to North America by almost 30%.

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 Daikin is expanding its capacity to meet an anticipated surge in demand for energy-efficient units in the United States after President Joe Biden returned the country to the Paris climate accord, and is expected to gradually introduce tougher energy regulations for consumers. air conditioning equipment, an area in which the United States has been behind other nations.

Daikin's approximately 70,000-square-meter plant in San Luis Potosí, Mexico will primarily produce two types of products for the US market. One will be central air conditioning systems that use inverters for precise control of motor rotational speeds. These can reduce carbon dioxide emissions by 20% to 30% compared to models without such inverters.

US market penetration is only in the 10% range for inverter-type air conditioners for residential use. With the help of the new Mexican plant and the production center in suburban Houston, Daikin plans to sell half a million units in the fiscal year ending March 2026, more than six times the sales volume forecast for this fiscal year. 

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Units to be produced in Mexico are currently shipped to the US from factories in Thailand and other parts of Asia. But shipping has come to represent more than 20% of the total cost, according to the model, which caused the company to choose nearshoring and take advantage of logistical proximity. With the Mexican plant, Daikin can achieve stable supplies at a lower price. The delivery time can be reduced by about eighty percent.

Additionally, Mexico is home to a large number of air conditioning component suppliers, as well as automotive suppliers that manufacture plastics that can be used for AC equipment. On Potosí soil, Daikin will build a local supply chain that is less exposed to global disruptions.

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