The European Union’s Restrictions on Hazardous Substances (RoHS) Directive is proving to be a challenge for small and midsize air conditioner makers in China, according to a report from Research and Markets. The Ireland-based research company’s report, China Sourcing Report: Air Conditioners 2006, found that China’s air conditioners industry is consolidating and points to RoHS as one of the factors. In fact, exports to the EU have dropped considerably since the directive came into effect.

The European Union’s Restrictions on Hazardous Substances (RoHS) Directive is proving to be a challenge for small and midsize air conditioner makers in China, according to a report from Research and Markets. The Ireland-based research company’s report, China Sourcing Report: Air Conditioners 2006, found that China’s air conditioners industry is consolidating and points to RoHS as one of the factors. In fact, exports to the EU have dropped considerably since the directive came into effect. Currently, there are about 150 air conditioner manufacturers in the country, down from 200 in December 2004. In addition to RoHS, the consolidation is increasing because of intense competition, rising raw material costs, and anti-dumping investigations. Despite the ongoing consolidation, export sales are still growing about 15 percent. China continues to be the world’s largest producer of air conditioners. The country manufactures an estimated 60 percent of global output in the line. It is also the largest exporter of air conditioners, accounting for a little over 30 percent of total global exports, followed by Thailand with a 14 percent share and Italy 7 percent.