Indonesia’s air conditioner (AC) industry is experiencing a resurgence, driven by rising domestic demand and fresh investments from major manufacturers. PT Daikin Industries Indonesia has officially begun mass production at its first full-scale residential AC plant in Cikarang, West Java, with an annual capacity of 1.5 million units. Backed by an IDR 3.3 trillion investment, the factory adheres to Japanese production standards and aims to release its first products by July 2025. Similarly, LG Electronics Indonesia is set to launch a new AC plant in Cibitung, investing IDR 374 billion to produce up to 1.8 million units, with plans for future expansion.
The sector’s momentum is further bolstered by tech players like Xiaomi, which will enter the smart AC market with its Mijia Air Conditioner Pro Eco in March 2025. According to Deputy Industry Minister Faisol Riza, domestic demand—driven by rising temperatures—now stands at 5 to 6 million units annually, attracting multinational brands like Sharp, Daikin, LG, and Midea to invest locally. Despite this growth, production capacity utilization remains modest at 30–40%, with over 18 brands assembling or manufacturing locally. While domestic production meets 60–70% of residential demand, the market remains sensitive to shifts in purchasing power and government budget policies. Still, the overall outlook is positive, reflecting strong industrial commitment and rising consumer interest, setting the stage for long-term industry expansion.
