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The Air Conditioning (AC) Systems Market size is forecast to increase by USD 47.02 billion, at a CAGR of 6.46% between 2023 and 2028. The emerging trend of increased demand for smart air conditioning systems is shaping market growth. Factors driving this surge include technological advancements, energy efficiency awareness, and comfort convenience desires. Technological progressions, such as intelligent sensors and internet connectivity, optimize energy usage. Additionally, remote system control adds convenience, especially when users are away. However, the market faces challenges, notably the high upfront costs of energy-efficient AC systems.
Despite long-term benefits, these costs deter buyers, particularly in segments like commercial and industrial air conditioning. Government regulations can incentivize adoption. Market analysis and reports suggest a shift towards intelligent features and inverter and non-inverter technology. The market caters to various end users in residential, commercial, and institutional buildings, available through online stores. Both unitary and rooftop ACs, along with split and window units, serve diverse environments from offices and retail spaces to manufacturing plants and healthcare facilities.
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The residential segment is estimated to witness significant growth during the forecast period. With the rising global temperatures and increasing disposable income of people, the demand has witnessed substantial market growth analysis, particularly among residential consumers. One of the primary drivers of the residential segment in the market is the growing urbanization and population shift toward urban areas.
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The residential segment was the largest and was valued at USD 40.88 billion in 2018. The residential segment in the AC systems market is highly competitive, with numerous manufacturers and suppliers catering to diverse customer requirements. AC-systems market players are investing in research and development activities to introduce innovative and technologically advanced. These systems often integrate smart features, such as remote control operation, IoT connectivity, and energy consumption monitoring, to enhance user experience and improve energy efficiency. Thus, the residential segment in the market is expected to witness significant growth during the forecast period.
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APAC is estimated to contribute 51% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional market trends and analysis and drivers that shape the market during the forecast period. APAC, known for its large population and increasing urbanization, has created a strong demand for cooling solutions across various sectors such as residential, commercial, and industrial. The APAC region experiences extreme climates, particularly in countries such as India, Singapore, and Australia. This further drives the need for air conditioning-systems to provide relief from hot and humid conditions. As a result, both centralized and decentralized air conditioning solutions have gained popularity in these regions.
Additionally, the growing awareness about energy-efficient technologies and environmental concerns has led to the adoption of energy-efficient alternatives in APAC. Governments and regulatory bodies are promoting the use of eco-friendly cooling solutions, which use less power and have lower carbon emissions. This has further influenced the market dynamics, with both manufacturers and consumers embracing sustainable practices. Thus, the market in APAC is anticipated to witness robust market growth and forecasting during the market forecast period.
The market is witnessing increasing demand driven by the need for energy-efficient products and the rise in urbanization. A prominent trend in this market is the increased demand for smart air conditioning systems, reflecting a shift towards more technologically advanced and environmentally friendly solutions. However, a significant challenge facing the industry is the high upfront costs associated with energy-efficient and sustainable AC systems, particularly in regions like the Gulf countries where climate change and urban heat island effects intensify the need for effective cooling solutions.
Despite this challenge, the implementation of inverter technology and variable refrigerant flow (VRF) systems offers the potential for improved energy efficiency and cooling capacity. Moreover, initiatives such as the Super-Efficient Air Conditioning program aim to promote the adoption of green building practices and encourage the use of HVAC systems with higher Seasonal Energy Efficiency Ratio (SEER) ratings. As demand continues to surge across residential, commercial, and institutional buildings, including offices, retail spaces, and healthcare facilities, the air conditioning systems market must navigate challenges while embracing innovations to meet the evolving needs of consumers and address environmental concerns.
The market growth for energy-efficient HVAC systems is significantly driven by increasing demand. Amidst climate change concerns and resource depletion, there's a heightened awareness of energy conservation and environmental impact reduction. HVAC systems, crucial for indoor comfort and air quality in residential, commercial, and industrial buildings, face scrutiny for their energy consumption. Traditional systems often lead to high electricity bills and greenhouse gas emissions. Thus, there's a surge in demand for energy-efficient alternatives, including systems with intelligent features, inverter technology, and higher Seasonal Energy Efficiency Ratio (SEER). This demand spans across residential and commercial end users, encompassing various segments like unitary segment, non-inverter segment, commercial segment, central air conditioning systems, split air conditioning systems, window unit air conditioning system, ductless mini-split systems, room air conditioners, commercial air conditioning, and packaged air conditioners, meeting the needs of office buildings and beyond.
Energy-efficient HVAC systems are designed to optimize energy consumption while providing effective cooling and heating. These utilize advanced technologies such as variable refrigerant flow (VRF), heat pumps, and smart controls to achieve greater energy efficiency. Thus, the increasing emphasis on energy conservation, rising energy costs, environmental concerns, and technological advancements will drive the growth of the market during the forecast period.
Increased demand for smart air conditioning systems is an emerging trend shaping the market growth. This surge in demand can be attributed to several factors, including technological advancements, growing awareness about energy efficiency, and the desire for enhanced comfort and convenience. Technological advancements have played a crucial role in the rise of smart air conditioning systems. These systems utilize intelligent sensors, intelligent and connected features, internet connectivity, and automation to provide efficient cooling solutions. With the help of sensors, smart air conditioners can detect the occupancy of a room and adjust the temperature accordingly, optimizing energy usage.
Additionally, the ability to control the system remotely adds convenience by eliminating the need to manually adjust settings, especially when users are away from home. Thus, technological advancements, growing awareness about energy efficiency, and the desire for enhanced comfort and convenience will propel the growth of the market during the forecast period.
High upfront costs of energy-efficient and sustainable AC systems is a significant challenge hindering the market growth. The market faces numerous challenges, with one significant hurdle being the high upfront costs associated with energy-efficient and sustainable AC systems. Although these systems offer long-term benefits and reduced energy consumption, their initial installation and purchasing expenses can deter potential buyers. Further, the lack of consumer awareness and education about the long-term benefits of energy-efficient AC systems poses a challenge.
Many buyers prioritize short-term cost savings over investing in sustainable technologies. This mindset often leads to the adoption of cheaper, conventional AC-systems that consume more energy and have higher carbon footprints. Government regulations and policies play a crucial role in encouraging or mandating the use of energy-efficient and sustainable AC-systems. Thus, the high upfront costs of energy-efficient and sustainable AC systems will hamper the growth of the market during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market research and growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Alfa Laval AB - The company offers window air conditioners, portable air conditioners, and wall-hung split or multi-head split systems, which provide solutions for major projects such as comfort cooling in skyscrapers.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is witnessing significant growth, driven by factors such as commercial construction projects and the increasing demand for energy-efficient products across various regions, including the Gulf countries. Initiatives like the Super-Efficient Air Conditioning program are promoting the adoption of unitary and packaged terminal air conditioners (PTAC).
Technological advancements, particularly in the inverter segment, are reshaping the market landscape with a shift towards inverter technology and variable refrigerant flow (VRF) systems. These systems not only offer enhanced cooling capacity but also utilize low-global warming potential (GWP) refrigerants, aligning with green building practices.
Moreover, the demand for multi-zone air conditioning systems and ductless mini-splits is rising, especially in commercial and industrial settings such as data centers, manufacturing facilities, and healthcare institutions. These systems improve indoor air quality (IAQ) and address the challenges posed by urban heat island effects.
Both residential and commercial end-users are increasingly inclined towards energy-efficient designs and intelligent, connected features, driving the market forward. With the implementation of Energy Efficiency Standards and Air Conditioning System Labelling Programmes, the industry is poised for further expansion, catering to diverse needs through multi-brand stores, exclusive stores, and online platforms.
The market report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends, market research and growth opportunities from 2018 to 2028.
Air Conditioning Systems Market Scope |
|
Report Coverage |
Details |
Page number |
174 |
Base year |
2023 |
Historic period |
2018-2022 |
Market forecasting period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.46% |
Market Growth 2024-2028 |
USD 47.02 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
6.32 |
Regional analysis |
APAC, Europe, North America, Middle East and Africa, and South America |
Performing market contribution |
APAC at 51% |
Key countries |
US, China, Japan, Germany, and UK |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Alfa Laval AB, Carrier Global Corp., Daikin Industries Ltd., Electrolux AB, Emerson Electric Co., Gree Electric Appliances Inc. of Zhuhai, Haier Smart Home Co. Ltd., Hisense International Co. Ltd., Hitachi Ltd., Johnson Controls International Plc, LG Electronics Inc., Panasonic Holdings Corp., Samsung Electronics Co. Ltd., Sharp Corp., Siemens AG, Midea Group Co. Ltd., Toshiba Corp., Trane Technologies plc, Whirlpool Corp., and Mitsubishi Electric Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, market growth and trends, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Technology
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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