JAPAN: In an apparent u-turn, reports from Japan suggest that Daikin and Panasonic are to form a development and parts procurement alliance.

The Nikkei exclusively revealed yesterday that the two Japanese manufacturers were to form a comprehensive partnership in air conditioners, with plans to jointly develop next-generation environmental technologies and to procure parts.

Daikin and Panasonic first co-operated in parts procurement and the processing of discarded products under a consumer electronics recycling law in 1999. The two firms hoped the alliance would allow them to become the world’s leading producers of air conditioners. Under that deal, Panasonic was at one time selling badged Daikin units in Europe and the two companies also planned joint development of key components and technologies. In 2004 they went as far as establishing a $20.8m  joint venture company in China to produce compressor motors.

That partnership failed to deliver the desired benefits amid tough competition in Japan and ended up being effectively dissolved last year.

According to the Nikkei, the two companies are now looking to resurrect that partnership with Daikin president Masanori Togawa and Panasonic president Kazuhiro Tsuga meeting recently to agree to begin tie-up talks. An agreement could be finalised this summer.

The partnership is predicted to include developing environmental technologies, parts procurement, product supply and the cultivation of emerging markets. Refrigerants, presumably the development of R32 and its introduction in emerging markets, are expected to be key. Intriguingly, the joint development of next-generation refrigerants is also suggested.

Daikin may also supply parts to Panasonic through its production bases in Europe, the US and Asia.