Samsung Individual HVAC Solutions and Lennox Distribution Network Synergy Expected
'SmartThings' Applied to HVAC Products
Diversification of Distribution Channels Through Partnership Expansion
Samsung Electronics is accelerating its North American HVAC market strategy by partnering with U.S. heating and cooling company Lennox. The plan is to expand its presence in the highly profitable and growing North American heating, ventilation, and air conditioning (HVAC) market and to grow into a global leading HVAC solutions company.
On the 28th, Samsung Electronics announced that it has signed an agreement to establish a joint venture, 'Samsung Lennox HVAC North America,' with Lennox, a premium brand in the North American region.
The joint venture will be owned 50.1% by Samsung Electronics and 49.9% by Lennox. The joint venture is scheduled to launch in the second half of this year in Roanoke, Texas, USA. The specific investment amount has not been disclosed separately. Founded in 1895, Lennox is a specialized company in the residential and commercial HVAC sector with a wide distribution network in North America.
Through this joint venture, Samsung Electronics plans to actively target the rapidly growing ductless HVAC market by leveraging Lennox’s distribution network. In North America, where single-family homes dominate, the ceiling space is wide, making duct installation easy and resulting in a high proportion of unitary systems. However, with the recent increase in multi-family housing and small to medium-sized buildings, demand for ductless systems and hybrid systems combining unitary and ductless HVAC is growing.
Accordingly, Samsung Electronics, which has provided ductless HVAC solutions worldwide for over 40 years, and Lennox, which has a North American distribution network and unitary HVAC solutions, are expected to create synergy through collaboration. Samsung Electronics will expand sales channels by adding Lennox’s distribution network to its existing one, while Lennox will strengthen its business by selling Samsung Electronics’ ductless HVAC products in addition to its unitary products. The joint venture will supply ductless HVAC products under the joint brand (Lennox powered by Samsung) to Lennox’s directly operated stores and home builder partners in North America, and supply Samsung-branded products to existing Samsung Electronics distribution stores.
Samsung Electronics’ ductless HVAC products will incorporate 'SmartThings,' which enables device interconnection and control, and 'SmartThings Energy,' which monitors and reduces whole-home power consumption. Through this partnership, Samsung plans to provide consumers with AI life solutions and connected experiences based on its leadership in artificial intelligence (AI), software, smartphones, and semiconductors.
Additionally, Samsung plans to diversify distribution channels by expanding partnerships with North American home builders and to broaden business opportunities beyond HVAC solutions to include various products and solutions such as home appliances and TVs.
The North American region is expected to see steady growth in the HVAC market due to urbanization, population growth, and energy regulations. According to market research firm VESRIA, the North American HVAC market is projected to grow about 8% from $29.7 billion in 2023 to $32 billion in 2024, reaching $48.8 billion by 2034.
Alok Maskara, CEO of Lennox, said, "The joint venture was formed by two companies with strong customer trust and leading market positions. We are honored to have the opportunity to collaborate with Samsung, which invests in HVAC technology to satisfy customers, and we look forward to the future that the two companies will create together."
Choi Kyung-sik, President of Samsung Electronics North America, said, "This collaboration, focused on excellent ductless HVAC products and customer network acquisition, will further strengthen our market competitiveness. We will jointly introduce innovative technologies in the HVAC sector going forward."
This collaboration is also expected to accelerate the improvement of the home appliance business, which has been struggling due to the economic downturn. Han Jong-hee, Vice Chairman and CEO of Samsung Electronics, who also heads the Digital Appliances (DA) division, said at a meeting held last month in Milan, Italy, "Although the DA division is not yet number one, entering the AI era with the halo effect of TVs and mobile phones and providing connected experiences will please consumers. The home appliance business will start to see profits from the second half of this year."
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
