Daikin Industries will establish a joint venture with U.S. air-conditioning parts manufacturer Copeland and provide it with compressor technology for the residential sector as the Japanese company aims for the top spot in the North American market.
Copeland will have a 51% stake in the joint venture, which was announced by both companies on Tuesday, with Daikin owning 49%. The companies are expected to invest $5 million in capital.
The venture is to begin operations by June and explore setting up a dedicated compressor factory in North America using Daikin’s technology by 2027.
Compressors circulate refrigerants to move heat from indoors to outdoors, accounting for 90% of the electricity used by air conditioning.
Daikin will supply its inverter swing rotary compressor technology, which fine tunes motor speed. Residential air conditioners equipped with inverters use about 30% less power than those without them.
Almost all air conditioners in Japan are equipped with inverters, but the figure in the U.S. is less than 10%. Stricter environmental regulations in states like California are expected to provide a tailwind for inverters in the American market.
Copeland CEO Ross Shuster praised Daikin at a news conference on Tuesday, saying the company was committed to technology that increases efficiency with an environmental focus.
Daikin Chairman and CEO Masanori Togawa said, “We want to make the North American air-conditioning market a market for environmental technology, our area of expertise.”
U.S.-based Trane Technologies held the top spot in the North American air-conditioning market in 2023 at 21.1%, followed by Daikin at 19%, according to Japan’s Deallab. Daikin’s North American air-conditioning sales in the year ended March rose 18% to 1.58 trillion yen ($10.3 billion).
“We want to overtake Trane by 2025, if possible,” Togawa said.
