ID: MRFR/CR/0313-CR | February 2021 | Region: Global | 112 pages
Air conditioning means the process of conditioning and impacting the air quality of a space to make the environment comfortable for the occupants. This process essentially works by removing excess moisture and heat from closed environments so that extreme natural environments can be adjusted to an individual’s preferred ones in the privacy of their homes. Air conditioning market globally comprises of residential and commercial sector and is also an extremely integral part of the automotive industry. Air conditioners, once considered luxury, are now transforming into basic necessities worldwide. Still the demand for heating and air condition systems is considered as a measure of the economic wealth of a nation.
Air Condition (AC) Market is expected to grow at Significant CAGR from 2019 to 2027 as per MRFR Analysis. This steady incline in the global air conditioner market share can be attributed to aggressive construction activity across the globe to accommodate the ever-increasing population as well as the steady increase in the living standards of people and widespread urbanization. Commercial AC market also finds itself on a growth path as providing clean air becomes a basic responsibility of corporate world globally.
The impact of automotive air condition systems and the auto air condition market on the overall global AC market is also highly significant as both passenger and commercial vehicles are being increasingly equipped with AC systems to suit the requirements of the specific region – AC systems are also called heating and air condition systems because they can also be customised to provide heat during cold weather conditions. With the automotive industry on a steady growth path – again powered by increasing population and a high rate of urbanisation – the AC market stays on a sustained upward trend.
Global AC industry reports state that after being on a rapid growth path for many decades, the industry is now in a maturity stage on its Product Life Cycle (or PLC) and is expected to stay such for a long time. This means, even in the current state, the major players can keep reaping the benefits of market growth for a sustained period. However, the latest trends in the market indicate that the global AC market share will be driven by Technological Advancements in the coming future. Rising environmental awareness and a driving focus on reducing carbon footprint is leading organisations towards innovative energy efficient solutions such as motion activated air conditioning system, sensor-driven ventilation, air conditioning system powered by ice, thermal powered air conditioning system and geothermal heating pumps, etc.
Impact Of COVID-19 on the global AC market growth:
All industries across the globe suffered the consequences of the COVID-19 pandemic and experienced a slowdown unlike any other. Even the global construction industry was drastically hit owing to suspension of all activities in the wake of the recent pandemic. This has led to a slowdown in the global air conditioner market.
The Heating, Ventilation And Air Conditioning (HVAC) industry was also severely hit as a consequence of large scale shutdown of manufacturing units across the Asia Pacific regions which are considered market leaders in the air conditioner industry and the US and several European countries. The HVAC industry has also been doubly hit by a significant dip in consumer demand globally. The report also looks at the COVID-19 impact at great lengths.
AC Industry Market Dynamics
Population Expansion Drives Growth in AC market
The biggest growth driver of the global AC market undoubtedly is the endless population growth. With an increase in population, the demand for infrastructure as well as automobiles skyrocket and that eventually boils down to a rapidly increasing demand for air conditioning systems and keep the market trend growing upward. Increasing per capita income, rising disposable income and constantly worsening atmospheric conditions will be major growth drivers in this industry with India and China contributing the most. In the wake of COVID, the need for hospitals and individual clinics has gone up significantly; global impetus on more hotels and multiplexes already in place, the demand for commercial air conditioning systems will be on the rise.
The market will also be driven by the expansive growth in the tourism industry as hotels and commercial vehicles across the globe shall also look at a variety of portable and other AC systems in the near future. Consumers looking for energy-efficiency and on-the-go cooling systems will drive the portable air condition market. Also, with governments across the globe looking at efficient air conditioning, the public sector will be a major driver in this market.
Global AC Market Opportunities
Major technological innovations are now being spearheaded to make AC systems more fuel and energy efficient in the wake of increasing environmental awareness. This offers a major growth opportunity in the industry. Transitioning family systems, replacement demands for older units and a surge in the specific demand for split ACs are also opportunities that are explained at length in the report. Also, while developed economies are expected to grow at a subdued pace, the developing economies will be seen as emergent markets providing further growth opportunities.
Electricity Prices Restraint AC Market Growth
Electricity prices across the world provide a major hindrance in the AC market growth. Add to that the rising production costs – owing to reduced outsourcing to China due to trade bans and COVID conditions – and you witness a market with ever declining profit margins that restraint the growth of AC industry globally. Also, global warming causing an upheaval and creating uncertain weather conditions can further dampens the growth trend.
Shortage of raw materials now that supply chains universally have been disturbed is another major factor that will impact the AC market size during the forecast period.
One of the challenges mentioned and discussed at length in the report include market cannibalisation of the window ACs market share by split and mini-split ACs. The AC market is dictated by and large by APAC companies who are pioneers in technological innovation in this genre – a trend that is expected to continue well over and beyond the forecast period.
Innovative technologies are also challenging the industry face. More and more customers seem headed towards the new portable air conditioner systems and awareness of the environmental impact of traditional AC systems is paving way for newer and more eco-friendly models. These models aim at reducing carbon footprint of technology but also challenge the AC market by paving way for newer, more energy efficient and desirable technologies.
Cumulative Growth Analysis
The global AC market is expected to register a Cumulative Annual Growth Rate (CAGR) of 5.87% during the forecast period. This growth will be dominated by technological advancements and heightened customer demand from the Asia Pacific region. Critical changes in government regulations – like banning the usage of R-22 refrigerants – create awareness and need for eco-friendly models than can efficiently replace the conventional AC in residential, commercial and vehicular market space. This creates a replacement need that provides impetus to the overall industry growth rate.
The commercial central AC market segment is also expected to witness a slightly higher growth rate than the industry overall owing to significant growth in the number of commercial establishments – like hotels, hospitals, individual clinics, etc.
Types Of Air Condition Systems
There are various types of air-conditioning systems already on the market and many others still being developed. The market on the whole is segmented based on various factors like type, technology, sector, end user, etc. The report breaks down the market into the following segments for a detailed study.
The report analyses the regional air conditioning market and estimates APAC to be a dominant force in the global AC market segment. In the year 2018, about 37% of the global AC systems demand was provided for by this region. The reason for this dominance is two-fold. First is the established technological expertise of the APAC region in this specific market and second would be a culmination of the warm and temperate nature of the leading APAC economies and the rampant population growth and industrialisation in the region in the recent past – a trend that is expected to continue well into the forecast period.
This report analyses global data that is collected from varied sources such as interviews with industry experts as well as company and government press releases to understand a global trend in the light of post COVID changes in the industry.
Key players in this market are identified as under:
In February 2019, the Indian government, in collaboration with Energy Efficiency Services Limited (EESL), launched the Super-Efficient Air Conditioning program to promote energy efficient technologies to reduce overall energy consumption by AC systems.
The report seeks to explore the nature and trends of the current global AC market at length, in light of the various challenges, threats and opportunities unique to this industry. Some of the key focus areas of this report are:
Frequently Asked Questions (FAQ) :