Global Air Conditioning Systems Market By Type(Unitary, Rooftop, PTAC), By Technology(Inverter, Non-Inverter), By Application(Residential, Commercial, Industrial), By Region and Companies - Industry Segment Outlook, Market Assessment, Competition Scenario, Trends and Forecast 2024-2033

Market Overview

The Air Conditioning Systems Market size is expected to be worth around USD 237.5 billion by 2033, from USD 126.5 Bn in 2023, growing at a CAGR of 6.2% during the forecast period from 2023 to 2033.

Owing to lower consumer spending, the COVID-19 outbreak negatively affected the demand for air conditioners in 2021. However, the changing climate and increasing demand for commercial buildings will help the market recover and grow in 2021. In the forecast period, air conditioners will continue to be in high demand due to consumers’ increasing desire for convenience and comfort.

*Actual Numbers Might Vary In The Final Report

Key Takeaways

• Market Growth: The Air Conditioning Systems Market is projected to escalate from USD 126.5 billion in 2023 to an estimated worth of USD 237.5 billion by 2033, exhibiting a robust CAGR of 6.2%. This growth is primarily fueled by increasing demand in residential, commercial, and industrial sectors.
• Market Drivers: Factors driving market growth include rising consumer demand for comfortable living spaces, amplified need for enhanced customer experiences in commercial settings, and the necessity for controlled environments in industrial sectors.
• Market Segments: Key segments include Unitary, Rooftop, and PTAC in terms of types, with technology divisions categorized as Inverter and Non-Inverter systems. Each segment caters to specific needs, with growing popularity attributed to advancements like inverter technology and energy-efficient systems.
• Regional Dynamics: North America led in revenue share in 2023 (35.9%), driven by replacement sales and governmental initiatives promoting energy-efficient systems. However, regions like Asia-Pacific faced decline due to economic impacts of the COVID-19 pandemic.
• Key Industry Players: Notable players shaping the market landscape include DAIKIN Industries Ltd., Whirlpool, Carrier Global, Hitachi Ltd., and Mitsubishi. These entities drive market growth through strategic moves like acquisitions, mergers, and technological advancements.
• Challenges: Environmental concerns, energy consumption, cost, and retrofitting older structures to accommodate advanced systems are hurdles hindering market expansion. Convincing consumers about the benefits of newer technologies remains a challenge.
• Opportunities: The market offers opportunities in eco-friendly systems, smart technology integration, expansion in developing countries, research for innovative cooling technologies, and focus on indoor air quality improvements.

Type Analysis

In 2023, Rooftop air conditioning systems led the market, holding over 50.5% share. These systems are widely used in commercial buildings, offering efficient cooling solutions placed on rooftops, conserving space within the premises.

Unitary air conditioners will be in high demand due to the rising residential sector. Pairing a unitary AC with warm furnaces in the same conduit work in residential and commercial buildings is possible. This will increase the segment’s growth. Unitary ACs are not the only type segment. The Type segment also includes rooftop ACs and Packaged Terminal Air conditioners.

The segment of PTAC is expected to grow at a healthy CAGR of 6.3% between 2023-2032. The growing popularity of package terminal conditioners can be attributed to their increased adoption in the residential and hospitality sectors. PTACs enjoy technological advances like inverter technology, energy-efficient systems, and wireless connectivity.

Technology Analysis

The air conditioning systems market can be categorized based on the technology employed, mainly into inverter and non-inverter systems. Inverter technology represents a more advanced system that adjusts the compressor’s speed to control the cooling or heating process more efficiently.

This technology is recognized for its ability to adjust their speed according to cooling demand, leading to more energy-efficient operations and quieter operations compared to non-inverter systems.

Non-inverter systems operate at a fixed speed; when necessary, their compressor switches on and off periodically to achieve temperature regulation. While effective in providing the necessary cooling or heating, these systems generally consume more energy compared to their inverter counterparts. The fixed-speed operation may also contribute to a slightly noisier experience.

In recent years, inverter technology has gained significant traction due to its enhanced energy efficiency and quieter performance. However, non-inverter systems remain prevalent in the market, appreciated for their simplicity and proven efficacy in maintaining consistent indoor temperatures. Both technologies cater to different consumer preferences and needs, contributing to the diverse landscape of the air conditioning systems market.

*Actual Numbers Might Vary In The Final Report

End-Use Analysis

The air conditioning systems market revolves around three primary applications: residential, commercial, and industrial. Residential systems are tailored for homes, apartments, or individual rooms, providing comfort by regulating temperatures according to homeowners’ preferences. These systems are relatively smaller in scale and designed to cater to the needs of smaller living spaces, ensuring a comfortable environment within households.

In contrast, commercial air conditioning systems are engineered for larger spaces such as offices, retail shops, restaurants, or other commercial establishments. These systems are more robust and capable of efficiently cooling or heating larger areas compared to residential systems. They’re designed to meet the demands of varied commercial settings, ensuring comfort for employees, customers, or visitors.

Industrial air conditioning systems cater to the needs of vast industrial spaces like factories, warehouses, or manufacturing plants. These systems are heavy-duty, specifically engineered to maintain optimal temperatures within these large-scale environments.

They play a critical role in ensuring suitable working conditions for machinery, preserving product quality, or regulating temperature-sensitive materials. Each category of air conditioning systems is tailored to suit different environments and requirements, catering to the distinct cooling or heating needs of residential, commercial, and industrial settings. These systems play a pivotal role in maintaining comfort, productivity, and operational efficiency across various spaces.

Key Market Segments

By Type

• Unitary
• Rooftop
• PTAC

By Technology

• Inverter
• Non-Inverter

By Application

• Residential
• Commercial
• Industrial

Drivers

The air conditioning systems market is growing for a few reasons. First, more people want comfortable homes, so there’s a bigger need for air conditioning in houses. In shops, offices, and restaurants, there’s a push for better customer experiences, so these places are getting more air conditioning too. Factories and warehouses also need special air conditioning to keep their machines working well and protect products.

New technologies are making air conditioning systems better. They’re becoming more energy-efficient and eco-friendly, using smart features to save energy. This matches the trend of wanting things that are good for the environment and cheaper to run. Because more people want comfortable homes, better shopping experiences, and efficient factories, the market for air conditioning systems keeps growing. Technologies that save energy and are eco-friendly are also pushing this growth.

Restraints

Air conditioning systems face some unique hurdles that impede their growth, including how these systems impact the environment and use up significant amounts of energy. Cooling things off requires using chemicals that may harm the ecosystem, so there’s an increasing trend toward creating eco-friendly air conditioners, although creating these eco-friendly models may prove challenging or costlier than originally anticipated. Cost can also be an issue: more efficient air conditioning systems tend to be more costly, making it harder for those on tight budgets or in regions without access to adequate funds to buy these improved systems.

Building older structures to fit newer systems can also be a significant hassle, requiring lots of work and expense in order to install advanced air conditioning systems that weren’t originally intended to support them. Prices of materials used to construct air conditioning systems can fluctuate regularly, creating challenges for companies that create them and making purchasing them difficult for consumers. Uncertainty could prevent people from purchasing them and make their purchase impossible for some individuals.

Some industries or locations may take longer than expected to accept and implement more efficient systems, due to either their slow acceptance or ignorance about their benefits. This slow adoption or lack of awareness hinders their widespread usage and utilization.

Overall, creating air conditioning systems that are better for the environment while remaining cost-effective and easy to install in older buildings remains one of the largest challenges facing this market. Materials prices fluctuating and convincing people of the benefits associated with newer technologies also remain obstacles to its expansion.

Opportunities

The air conditioning market has some good chances for growth. One big opportunity comes from people wanting systems that save energy and are good for the environment.Air conditioners that use less energy and contain eco-friendly materials have become an important market segment, giving companies that manufacture such systems an excellent opportunity to expand as more people demand them.

Another opportunity is in smart technology. Making air conditioners that can be controlled remotely or adjust settings on their own is becoming popular. These features make systems easier to use and help save energy.

Companies developing these smart air conditioners have a good chance to expand in the market. As more buildings rise in developing countries, their residents and offices increasingly require air conditioners as cooling needs grow. Companies making air conditioners have a chance to sell more in these places.

Research into new cooling technologies is also an opportunity. Finding better ways to cool air or developing new materials for these systems can lead to innovative products. Companies investing in these advancements can make air conditioners that are more efficient and better for the environment.

Improving the quality of indoor air is another growing trend. Air conditioners that clean the air and protect against viruses are in demand, especially in places like hospitals or schools. Companies making these healthier air conditioning systems have an opportunity to meet this need in the market.

Challenges

The air conditioning market has some tough problems that make it hard to grow. One big challenge is how traditional systems harm the environment. These systems use chemicals that can cause global warming. People want more eco-friendly systems, but making these alternatives is tricky and expensive. Cost is also a big issue. The newer, better air conditioners can be more expensive. This makes it tough for people or businesses with limited budgets to buy these systems.

Changing older buildings to fit these new systems is also a headache. Installation of advanced air conditioning systems in buildings that weren’t originally intended requires both money and time-intensive efforts while incurring significant financial costs as a result. Prices of materials used to construct these systems can fluctuate drastically, creating uncertainty for their manufacturers and making purchasing difficult for people. Air conditioning units may become difficult or impossible for some consumers to afford.

Some places or industries may be slow to adapt to these newer, superior systems; they might prefer their familiar systems or not understand all their benefits. Making air conditioning systems that are better for the environment, cost less to set up in older buildings, and are easy to manage are among the biggest challenges of today’s air conditioning market. Also important: adapting material prices as they fluctuate while convincing people to adopt these cutting-edge technologies is another issue affecting this field.

Regional Analysis

North America held the highest revenue share at over 35.9% in 2023. In the future, markets in North America will be able to grow alongside other developed regions in the world. Replacement sales primarily drive this growth. The market will also benefit from rising government promotions to increase the adoption of air conditioning systems that are energy-efficient to lower energy consumption.

Despite the global market experiencing a slump due to the pandemic of COVID-19, North America and Europe experienced steady growth in 2023. This is partly due to the strong demand for both regions during the fourth quarter of 2023. These markets were not affected as severely as the rest. The COVID-19 pandemic significantly impacted Africa and the Middle East as well, with more than 15% of air conditioning system demand for 2023. The economic impact of several countries in the Middle East due to travel restrictions on sales led to a decrease in sales.

The Asia Pacific region experienced a significant decline in AC demand as well because several economies suffered, this is due to lockdowns in several countries because operations were shut down. In addition to this, China’s exports/ imports were affected due to travel/transportation restrictions.

*Actual Numbers Might Vary In The Final Report

Key Regions and Countries

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Spain
  • Rest of Europe
• APAC
  • China
  • Japan
  • South Korea
  • India
  • Rest of Asia-Pacific
• South America
  • Brazil
  • Argentina
  • Rest of South America
• MEA
  • GCC
  • South Africa
  • Israel
  • Rest of MEA

Key Players Analysis

Due to the presence of many established global players, this market is highly competitive. DAIKIN Industries Ltd., Whirlpool, Carrier Global, Hitachi Ltd., and Mitsubishi are some of the most prominent players in the market. These key players focused on growth strategies such as acquisitions, mergers, and collaborations to strengthen their market presence. Carrier global announced that it had purchased a controlling share in Giwee Group in June 2021.

Carrier was looking to expand its geographical footprint and strengthen their market position. Aside from acquisitions, market leaders also partner with local players to improve their products reach. Daikin Industries, Ltd., announced the creation of a joint venture, WASSHA Inc., in June 2020. Baridi Inc. emerged from the joint venture and provided air conditioning systems for Tanzanian citizens on a subscription model. Here are some of the most prominent global air conditioning systems market players.

Market Key Players

• Daikin Industries, Ltd.
• Hitachi Ltd.
• Haier Group
• Carrier
• Whirlpool Corporation
• BSH Hausgeräte GmbH
• Mitsubishi Electric Trane HVAC US LLC.
• ALFA LAVAL
• Lennox International, Inc.
• Wotsco, Inc.
• Fujitsu General Ltd.
• Other Key Players

Recent Developments

In January 2022,LG Electronics U.S. showcased their broad offering of HVAC solutions at the 2022 AHR Expo held in Las Vegas. LG demonstrated their extensive and comprehensive lineup for multiple market segments.

In March 2022, Voltas, Inc. is a premier player in the HVAC industry. Voltas unveiled its latest offering: PureAir Inverter ACs featuring cutting-edge technologies like HEPA Filter technology, PM 1.0 Sensor and an AQI Indicator that enhance indoor air quality and comfort for consumers. By expanding their portfolio with yet another cooling product or appliance from Voltas.

In February 2023,Godrej Appliances, which is part of Godrej & Boyce and stands as its flagship company within the esteemed Godrej Group, unveiled India’s inaugural leak-proof split air conditioner today. Anti-leak technology is being widely integrated by air conditioning manufacturers to elevate user experience while creating an outstanding value proposition in the air conditioning arena.

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