Rewiring Cooling: Global Players, Local Power

[edit] Rewiring Cooling: Global Players, Local Power

For decades, the air conditioning (AC) industry followed a well-worn script: produce in the cheapest locations, ship to wherever the demand is, and scale for efficiency. However more recently, that model has been under pressure, and it is starting to crack. What is replacing it is not just a new manufacturing strategy, but a rethinking of what it means for AC manufacturers to be resilient, responsive, and competitive in a fast-changing world.

[edit] From Global Risk to Regional Relevance: The New Reality for HVAC Manufacturing

Before the 1990s, most manufacturers produced relatively locally. Then globalisation swept in, and the race to the bottom on costs began. Ten years later, companies were not just producing overseas – they were acquiring their way into new markets, chasing global dominance through M&A and market expansion. By the late 2010s, trade friction started to rise, and the downsides of global complexity became harder to ignore. Around 2018, we saw serious moves back toward local production as firms tried to navigate new tariffs and trade restrictions. Then 2020 hit, and everything accelerated. Between the pandemic and international conflicts, companies realised resilience was not optional. By 2021, governments were getting involved too, offering incentives to bring production closer to end-users.

[edit] Why HVAC Supply Chains Are Shifting from Global Efficiency to Local Resilience

As we see, the shift away from globalised production is not theoretical any more – it is the reality. From Poland to Brazil, from Thailand to the Czech Republic, countries are increasingly announcing the opening of new production factories to meet local demand. Not because it is trendy, but because it makes more sense in today’s environment. The reasons behind this are many and interconnected.

First, the geopolitical landscape has become significantly more complex. Trade tensions, especially between global forces like the US and China, have introduced unpredictability into what used to be a stable, cost-driven decision. Tariffs have wiped out the savings that once came from offshore manufacturing. At the same time, conflicts and instability - from the war in Ukraine to rising tension in Israel, Iran, and the Strait of Hormuz – are putting extra pressure on already strained global trade routes.

Second, the legacy of the pandemic has left a permanent mark. Covid-19 exposed just how fragile global supply chains really are. One factory shutdown in one part of the world could delay entire product lines across multiple continents. That wake-up call forced many HVAC companies to rethink their sourcing strategies, bringing production closer to home to regain control over supply and timelines.

Finally, customers have changed too. There is growing demand for air conditioning systems that actually suit local needs, not just technically, but in terms of climate compatibility, building standards, and energy policies. Whether it is cooling systems adapted for tropical humidity or units designed for Europe’s toughest energy standards, today’s buyers are demanding products that feel native to their region, not generic imports retrofitted to local rules.

[edit] Localisation in Practice: Building Closer, Smarter, and More Resilient HVAC Operations

Manufacturers are listening.

Supply chain resilience has become a business imperative. The old model of relying on a single global supply chain is too risky. Instead, companies are investing in multiple sourcing options, regional suppliers, and backup plans.

Customisation is another major factor. It is not possible any more to produce a one-size-fits-all system and expect it to perform optimally in both a desert and in an urban centre in a Nordic city. Local production makes it easier and faster to tailor products to fit specific requirements.

And more importantly, automation, once a luxury, is now table stakes. Smart factories and advanced robotics have dramatically reduced the labour cost advantage of traditional low-cost countries. In fact, it is now entirely feasible and cost-effective to produce in higher-wage countries while still maintaining margins. That opens the door to regional production without the old price penalty.

So, what does localisation actually look like in practice? It might mean opening a manufacturing plant in India to serve South Asia or using a Polish factory to supply the European market. It often involves investing in smarter, automated production lines that can adapt to changing demand. It also means forming local partnerships, strengthening regional distribution networks, and keeping a much closer eye on local regulations and incentives.

[edit] Conclusions

Together, all of these trends represent more than just a response to the recent crisis. They mark a fundamental change in how companies think about value. It is not just about minimising cost any more; it is about maximising relevance, responsiveness, and resilience to be closer, not just geographically, but culturally and strategically, to the customer.

We are entering an era where success is not defined by how far you can ship, but by how closely you can serve. Globalisation is not going away, but it is being rebalanced. And in the air conditioning industry, localisation may just be the cool new standard.

This article appears on the BSRIA news and blog site as "Rewiring Cooling: Global Players, Local Power" dated July, 2025 ans was written by Silvia Semova: A Senior Market Intelligence Analyst and Project Manager at BSRIA, specialising in the global air conditioning, heating and heat pump markets. Passionate about sustainability and innovation, she closely monitors key trends in energy-efficient technologies and policy developments shaping the future of climate control worldwide.

--BSRIA

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