Daikin Expands Presence in Japan’s Air Conditioning Market — Growth Driven by Replacement Demand and Environmental Initiatives

Steady performance in both residential and commercial segments, with refrigerant recovery and recycling leading the industry

Japan’s air conditioning market is seeing steady growth, largely supported by rising replacement demand as existing systems reach the end of their lifecycle. Within this market, Daikin has strengthened its position across both residential and commercial segments. In the fiscal year ending March 2025, higher-than-average national temperatures and an improvement in consumer sentiment due to wage growth contributed to stronger residential air conditioner sales.

On the commercial side, energy-efficient models such as “FIVE STAR ZEAS” and the “VRV Q Series”, which allows reuse of existing piping, have gained traction. These offerings have proven particularly popular in the replacement market, helping Daikin maintain solid growth and increase its visibility in the sector.

The company is also placing emphasis on refrigerant recovery and recycling, an area where it has established a leading position in Japan. This initiative not only reduces environmental impact but also creates new business opportunities. For the fiscal year 2025, Daikin estimates a CO₂ reduction equivalent to approximately ¥900–1,100 billion, comparable to eliminating the emissions of around 349,000 cars.

Looking ahead to the fiscal year ending March 2026, Daikin plans to expand its residential lineup with high-value models such as “Ururu Sarara X,” while in the commercial segment it will introduce a new VRV series adopting the R32 refrigerant. By combining replacement demand with strong environmental solutions, the company is expected to further enhance its competitiveness, not only in Japan but also in global markets.

Key Terms Explained

Replacement Demand: Demand generated by the need to replace aging or outdated air conditioning systems. A key driver of stable growth in the Japanese market.

FIVE STAR ZEAS: A highly energy-efficient commercial air conditioner favored by small to mid-sized offices and retail shops for its comfort and cost savings.

Refrigerant Recovery and Recycling: The process of collecting and reusing refrigerants from old systems. A major initiative that directly contributes to significant CO₂ reduction.

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