Air Conditioning Systems Market Size, Share & Trends Analysis Report By Type (Unitary, Rooftop, PTAC), By Technology (Inverter, Non-inverter), By End-use, By Region, And Segment Forecasts, 2021 - 2028

Report Overview

The global air conditioning systems market size was valued at USD 106.60 billion in 2020 and is expected to expand at a compound annual growth rate (CAGR) of 6.2% from 2021 to 2028. The spread of the COVID-19 pandemic negatively impacted the demand for air conditioners in 2020 owing to decreased consumer spending. However, the market is expected to revive in 2021 and record a stable growth aided by the changing climate conditions and rising demand for commercial construction. Additionally, consumers’ growing inclination toward convenience and comfort is expected to upkeep the demand for air conditioners over the forecast period.

Air conditioning systems are ubiquitous with applications ranging from homes, shopping centers, and commercial spaces to entertainment centers. In developing nations, AC is still a sought-after product; however, the affordability of environmentally optimized products is still a huge challenge. Air conditioning systems have played a pivotal role in transforming the indoor environment, particularly in hot and arid areas becoming an important part of the infrastructure that supports modern spaces. Further, as economic growth in emerging markets continues to surge, the demand for AC is anticipated to witness bullish growth over the next few years.

The market is also expected to be driven by factors such as the promising growth of the construction and tourism industries. The increasing disposable incomes of individuals across the globe are also expected to encourage the uptake of a variety of air conditioning systems over the forecast period. Additionally, factors like the rising inclination of consumers toward energy-efficient systems and the growing popularity of portable systems are also expected to positively impact the air conditioning systems market growth.

The rising population, which is anticipated to positively influence the residential and commercial constructions is also expected to increase demand for air conditioning systems. For instance, the rising population in Gulf countries is anticipated to contribute significantly to construction spending in GCC countries. The regional population is estimated to reach over 600 million by 2050 from 350 million in 2015. This is likely to propel growth in construction activities in the infrastructure and building sector, particularly education, housing, and healthcare infrastructure, to support communities.

Governments of various countries are focusing on efficient air conditioning. For instance, in February 2019, Energy Efficiency Services Limited (EESL), a joint venture of four Public Sector Enterprises under the administrative control of the Ministry of Power, Government of India, announced the launch of the Super-Efficient Air Conditioning program. The program is aimed at promoting the use of energy-efficient technologies and bringing about a reduction in energy consumption. Through this program, the Ministry of Power in India also aims to address India’s Hydrochlorofluro carbons Phase-out Management Plan and Cooling Action Plan by 2032.

Type Insights

Unitary ACs accounted for the largest revenue share in 2020 at 39.3% and are expected to record the highest growth over the forecast period. Unitary air conditioners are predominantly used in households. Therefore, the increasing demand from the growing residential sector is expected to upkeep the demand for unitary air conditioning systems. Additionally, a unitary AC can be easily paired with the warm furnaces in the same ductwork in both commercial and residential buildings which is estimated to boost the segment growth.

Apart from unitary ACs, the type segment also includes Packaged Terminal Air conditioners (PTAC) and rooftop ACs. The PTAC segment is expected to witness a healthy CAGR of 5.1% from 2021 to 2028. The growth of package terminal air conditioners is attributed to their increasing adoption in the hospitality and residential sectors. PTACs are also gaining traction owing to technological advancements such as the use of inverter technology, energy-efficient systems, and wireless connectivity.

Technology Insights

The inverter segment is projected to expand at a CAGR of 7.7% from 2021 to 2028. This growth is attributable to inverter AC’s ability to control the speed of the compressor motor which helps in the continuous regulation of temperature. It also helps in saving energy and power with the help of a variable speed compressor. Additionally, other benefits such as no temperature fluctuations, longer durability, faster cooling, and reduced noise in comparison with non-inverter ACs are expected to fuel the demand for inverter technology.

The non-inverter segment is expected to witness moderate growth as compared to its counterpart. This can be attributed to various factors such as high energy consumption, fluctuating frequencies, and less lifespan. However, the low cost of these air conditioning systems could help the segment improve its hold on the market.

End-use Insights

The commercial segment is anticipated to register a CAGR of 5.0% over the forecast period owing to rapid urbanization and rising demand for commercial space. Commercial AC units require a significant amount of space and are generally located on the rooftops of the buildings such as shopping malls, hotels, big restaurants, theaters, and commercial offices accounting for the optimum energy consumption. Hence, retrofitting and replacement of these units to minimize energy consumption is expected to elevate the adoption of AC across the commercial segment.

The residential segment will continue to be the mainstay category for several vendors in the market, recording a CAGR of 8.5% in the next seven years. Climate change has resulted in increased temperature across several countries in recent years. Increasing temperatures have rendered air conditioning systems more of a necessity than a luxury. Therefore, customers across the globe are installing air conditioning systems in their homes; this trend is expected to grow as the earth’s temperature rises even more in the future. Owing to the changing climatic conditions, residential ACs are projected to record healthy growth over the forecast period.

Regional Insights

North American accounted for over 20% of the overall revenue share of the market in 2020. The North American market along with other developed markets around the world is expected to witness growth primarily powered by replacement sales. Additionally, rising promotional activities from the government to increase the adoption of energy-efficient air conditioning systems to reduce energy consumption is also expected to fuel the growth of the regional market. Even though the overall market slumped due to the spread of the COVID-19 pandemic, North America and Europe recorded flat growth in 2020 and were not impacted as negatively as the rest of the world. This is attributed to the strong demand in the last quarter of 2020 in both regions.

The Middle East and Africa suffered the maximum impact due to the outbreak of the COVID-9 pandemic, with a plunge of more the 10% in air conditioning systems demand in 2020. The decline in sales was attributable to traveling restrictions forced by several countries impacting the economy of the Middle Eastern countries. The region is expected to rebound soon with major global events like Qatar FIFA World Cup 2022 scheduled in the region thereby promoting new constructions. The Asia Pacific region also experienced a significant decline in AC demand as economies suffered, operations were shut down, and imports/exports from China were impacted due to travel/transportation restrictions.

Key Companies & Market Share Insights

The market is characterized by intense competition owing to the presence of several well-established global players. Some of the leading players in the market are DAIKIN INDUSTRIES, LTD., Carrier, Hitachi Ltd., Whirlpool Corporation, and Mitsubishi Electric Trane HVAC US LLC. These market players particularly focus on inorganic growth strategies such as mergers and acquisitions and joint ventures/collaborations to enhance their market presence.

For instance, in June 2021, Carrier announced the acquisition of a controlling stake in Guangdong Giwee Group (Giwee Group). The acquisition was aimed at expanding Carrier’s geographic footprint to enhance its market position. . In addition to acquisitions, major players in the market also indulge in collaborations with local players to increase their products’ reach. For instance, in June 2020, Daikin Industries, Ltd. announced the establishment of a joint venture with WASSHA Inc. The joint venture developed a new company, Baridi Inc., to provide air conditioning systems on a subscription basis for the people of the United Republic of Tanzania. Some of the prominent players operating in the global air conditioning systems market are:

• Daikin Industries, Ltd.

• Mitsubishi Electric Trane HVAC US LLC

• Hitachi Ltd

• Carrier

• Whirlpool Corporation

• Haier Group

Air Conditioning Systems Market Report Scope

Segments Covered in the Report

The report forecasts revenue and volume growth at global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2018 to 2028. For this study, Grand View Research has segmented the global air conditioning systems market report based on type, technology, end-use, and region:

• Type Outlook (Volume, Thousand Units; Revenue, USD Billion, 2018 - 2028)

  • Unitary

  • Rooftop

  • PTAC

• Technology Outlook (Volume, Thousand Units; Revenue, USD Billion, 2018 - 2028)

  • Inverter

  • Non-Inverter

• End-use Outlook (Volume, Thousand Units; Revenue, USD Billion, 2018 - 2028)

  • Residential

  • Commercial

  • Industrial

• Regional Outlook (Volume, Thousand Units; Revenue, USD Billion, 2018 - 2028)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Rest of Europe

  • Asia Pacific

    • China

    • India

    • Japan

    • Rest of Asia Pacific

  • Latin America

    • Brazil

    • Mexico

    • Rest of Latin America

  • Middle East & Africa