Air Conditioning Market Size 2024-2028 

The air conditioning market size is forecast to increase by USD 14.8 billion at a CAGR of 2.15% between 2023 and 2028. The market is witnessing significant growth, particularly in the commercial space, driven by the increasing demand for energy efficiency, indoor air quality, and user comfort. Technological advancements, such as NanoeX technology and Smart technology, are transforming the market, offering features like air filtration systems that effectively remove allergens and pollutants. The use of recycled materials in AC manufacturing is another trend gaining traction, as it aligns with the growing focus on sustainability. Moreover, smartphones and user-friendly interfaces are enabling remote control and real-time monitoring of AC systems, enhancing user experience. However, challenges such as volatility in operating costs and raw material prices, as well as the need for continuous innovation to meet evolving consumer demands, pose significant hurdles for market growth.

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The AC business is experiencing significant growth due to rising global temperatures and urban heat waves. Residential and commercial sectors, including residential buildings, office buildings, retail spaces, and healthcare facilities, are major consumers of air conditioners. The market is segmented into room air conditioners and packaged air conditioners. Smart technology and ecologically conscious goods, such as smart air conditioners and those using recycled materials, are gaining popularity. Developing nations and urbanization are key drivers of growth in the AC market. Nanoex technology and energy efficiency are major trends, with indoor air quality, allergens, and pollutants becoming increasing concerns. User comfort, humidity levels, and air filtration systems are also important factors.

Furthermore, smartphones and remote control functionality are enhancing user experience. The residential segment and commercial segment, including room AC windows and split AC, are the primary markets for ACs.

Market Segmentation

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• Product
  • Splits
  • Chillers
  • Airside
  • Others
• Distribution Channel
  • Offline
  • Online
• Geography
  • APAC
    • China
    • Japan
    • South Korea
  • Europe
    • Germany
  • North America
    • US
  • Middle East and Africa
  • South America

By Product Insights

The splits segment is estimated to witness significant growth during the forecast period. The market in the commercial space is experiencing significant growth due to the shift from energy-inefficient window units to modern, sleek split air conditioners. companies, such as Samsung, have ceased production of window air conditioners and instead focus on split air conditioners to meet the escalating demand from customers. Inverter-based split air conditioners are gaining popularity due to their energy efficiency. However, the demand for ducted standard split air conditioners is declining in favor of non-ducted standard splits and Japanese-style mini-splits. The increasing focus on energy efficiency, as evidenced by LEED certifications, is driving the demand for refurbished products in the market.

Furthermore, smart technology, such as air filtration systems and nanoeX technology for improving indoor air quality, and user comfort features, including compatibility with smartphones, are also key trends in the market. Allergens and pollutants are significant concerns, and air conditioning systems are increasingly being designed to address these issues, ensuring a healthier work environment.

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The splits segment accounted for USD 97.60 billion in 2018 and showed a gradual increase during the forecast period.

Regional Insights

APAC is estimated to contribute 47% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

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The market is witnessing significant growth, particularly in the commercial space. Advanced technologies such as NanoeX and smart technology are driving demand for AC systems that offer energy efficiency, indoor air quality improvements, and user comfort. These systems effectively address allergens and pollutants, making them essential in various industries, including healthcare and education. Moreover, the use of recycled materials in AC manufacturing is gaining popularity due to growing environmental concerns. Smart technology integration, including compatibility with smartphones, is also a key trend. In the Asia Pacific region, countries like China and Japan dominate the market, accounting for approximately 80% of the total share.

Moreover, India is projected to experience remarkable growth due to urbanization and increasing disposable incomes. Enhanced air filtration systems are also gaining traction as consumers prioritize health and well-being.

Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

Market Driver

Rise in residential construction activity is the key driver of the market. The market has experienced substantial growth due to the increasing construction activities and urbanization in both developed and developing nations. Technological advancements, such as the adoption of non-inverter technology, have led to the production of more energy-efficient solutions. This trend is particularly noticeable in the context of changing climate patterns and the growing demand for ecologically conscious goods. Multi-brand stores, exclusive stores, and online platforms are increasingly offering a wide range of air conditioners to cater to this demand. The global AC market is expected to continue its upward trajectory, fueled by the expanding residential sector and the need for comfort in various regions.

Furthermore, despite the economic downturn in the aftermath of the 2008 recession, the residential construction industry has shown resilience, with investments almost reaching pre-recession levels. This growth is set to drive the demand for air conditioning systems and related infrastructure.

Market Trends

Increase in use of R32 refrigerant in split ACs is the upcoming trend in the market. The market is witnessing significant growth due to changing climate patterns and increasing urbanization in developing nations. ACs are essential goods in today's world, and their demand is escalating as people seek energy-efficient solutions to combat rising temperatures. AC manufacturers are focusing on technological advancements to produce eco-friendly and ecologically conscious goods. Non-inverter technology, for instance, is gaining popularity due to its energy efficiency and cost-effectiveness. Multi-brand stores, exclusive stores, and online stores are stocking up on ACs with the latest technology. companies are increasingly using R32 refrigerant, which has a lower global warming potential (GWP) and consumes less electricity than traditional refrigerants like R-410A and R-22.

In addition, this shift towards energy-efficient refrigerants is a response to the growing concern for reducing carbon footprints and minimizing environmental impact. Moreover, the AC market is witnessing a increase in demand for air conditioners that offer superior cooling capacity, quiet operation, and easy maintenance. Technological advancements, such as smart controls and Wi-Fi connectivity, are also driving the growth of the AC market. With the increasing focus on energy efficiency and environmental sustainability, the future of the AC market looks promising.

Market Challenge

Volatility in operating costs and raw material prices is a key challenge affecting the market growth. The market is experiencing significant growth due to changing climate patterns and increasing urbanization in developing nations. Non-inverter technology, a cost-effective and energy-efficient solution, is gaining popularity in the market. The market comprises various channels such as multi-brand stores, exclusive stores, and online stores. Technological advancements continue to shape the industry, with manufacturers focusing on producing ecologically conscious goods. The manufacturing process of ACs involves the procurement and utilization of several raw materials, including steel, iron, plastic, glass, electronic equipment, petroleum products, and paints.

The prices of these raw materials are subject to international market fluctuations, leading to potential price instability for manufacturers. Furthermore, despite these challenges, the industry is expected to continue its upward trajectory, driven by increasing demand for cooling solutions in both developed and developing economies.

Customer Landscape

The market forecasting 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 growth analysis strategies.

 Customer Landscape

Key Companies & Market Insights

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.

Blue Star Ltd. - The company offers air conditioning such as fixed speed split air conditioners.

The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• Daikin Industries Ltd.
• DeLonghi Group
• Electrolux group
• Emerson Electric Co.
• Fujitsu Ltd.
• Haier Smart Home Co. Ltd.
• Hitachi Ltd.
• Honeywell International Inc.
• Johnson Controls International Plc.
• LG Electronics Inc.
• MIDEA Group Co. Ltd.
• Mitsubishi Electric Corp.
• Panasonic Holdings Corp.
• Samsung Electronics Co. Ltd.
• Trane Technologies Plc
• Transform Holdco LLC
• Toshiba Corp.
• Voltas Ltd.
• Whirlpool Corp.

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.

Research Analyst Overview

The market is witnessing significant growth due to the increasing urbanization and rising temperatures in various regions. The market caters to diverse sectors such as residential buildings, office buildings, retail spaces, healthcare facilities, data centers, and manufacturing plants. The demand for energy-efficient solutions, driven by changing climate patterns and ecologically conscious goods, is propelling the market forward. Smart technology and inverter technology are two major technological advancements transforming the AC business. Energy efficiency and indoor air quality are key factors influencing consumer preferences. Air conditioners come in various types, including room air conditioners, window AC, split AC, multi-split AC, central AC, VRF, and chillers.

Furthermore, inverter technology, energy efficient designs, and energy efficiency standards are crucial for manufacturers to meet the evolving demands of the market. The market is segmented into residential and commercial segments, with the commercial segment showing a higher growth rate. Online retail, multi-brand stores, exclusive stores, and direct sales channels are popular sales channels. Manufacturers are focusing on product launches, innovations, mergers and acquisitions, and collaborations and partnerships to expand their market presence. The use of recycled materials, nanoex technology, and air filtration systems are some of the emerging trends in the AC market. The market is expected to continue growing due to the increasing demand for user comfort, air filtration systems, and humidity control in various applications.

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What are the Key Data Covered in this Market Research and Growth Report?

• CAGR of the market during the forecast period
• Detailed information on factors that will drive the market growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market  and its contribution of the market in focus to the parent market
• Accurate predictions about upcoming market growth and trends and changes in consumer behaviour
• Growth of the market across APAC, Europe, North America, Middle East and Africa, and South America
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the growth of market companies

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