HVAC Systems Market Size, Share & Trends Analysis Report By Product (Ventilation, Cooling, Heating), By End Use (Residential, Commercial, Industrial), By Region, And Segment Forecasts, 2018 - 2025

Industry Insights

The global HVAC systems market size was valued at USD 118.7 billion in 2017 and is projected to expand at a CAGR of 5.7% from 2018 to 2025. Increasing urbanization and emergence of energy efficient heating and ventilation systems is the driving force for the growth of the market. Furthermore, governments across the globe promote the use of the energy efficient Heating, Ventilation, and Air Conditioning (HVAC) units by offering incentives and rebate programs is anticipated to bolster the growth.

Technologies such as Internet of Things (IoT), automated control systems, and remote control access are transforming HVAC equipment. Automated control systems, detect the surrounding climate and automatically control the temperature and fan speeds to offer optimum comfort. Remote control access allows users to operate connected systems through mobile applications with the help of internet. IoT enabled HVAC units can be connected to the internet and can provide real-time information about the condition of the systems to users and manufacturers, helping them anticipate defects and reduce maintenance costs.

Heating, ventilation, and air conditioning units add to the aesthetic value of residential and commercial places. Companies invest heavily in R&D to manufacture cost effective, energy efficient, and innovative products such as hybrid HVAC equipment that use multiple sources of energy for heating and cooling applications. Factors like evolving climatic conditions, growing population, demographic changes, rapid urbanization, and rising disposable income are driving the growth of the HVAC equipment market.

However, the installation and maintenance cost, high-energy consumption, and other operational challenges can hinder growth of the market for HVAC equipment. The climatic conditions in different regions can have adverse effects on the lifecycle of these systems. Regions with generally damp climatic conditions often tend to reduce the life expectancy of heating, ventilation, and air conditioning systems due to their corrosive effects, which is anticipated to hinder market growth.

Product Insights

HVAC equipment market can broadly be segmented into three categories, namely, heating, ventilation, and cooling. Heating systems are widely used in applications such as space heating, molding, floor and wall heating, and tensile testing among others. Ventilation systems remove excess odors, humidity, pollutants, and other contaminants from indoor areas. It is the most energy-efficient and cost-effective way to cool and improve the air quality of buildings.

The cooling HVAC units led with more than 50% market share in 2017 owing to the rising demand from the commercial sector and changing climatic conditions across different regions. The Variable Refrigerant Flow (VRF) cooling systems are used for a wide range of application such as preservation of food, chemicals, proteins, enzymes, and vaccines, among others. These systems find application across various industries such as healthcare, manufacturing, food production, and transportation among others. This factor is expected to drive growth of this segment over the forecast period.

End-use Insights

Based on end use, the market has been segmented into residential, commercial, and industrial. The residential segment held the market share of more than 40% in 2017. Residential HVAC units are smaller and simpler compared to their commercial and industrial counterparts. These systems are used in small places such as homes, small restaurants, and small stores.

However, the commercial segment is anticipated to expand at the highest CAGR over the forecast period owing to rapid urbanization and rising demand for commercial space. Commercial HVAC units take a significant amount of space and are generally located on rooftops of buildings such as shopping malls, hotels, big restaurants, theaters, and commercial offices accounting for the highest energy consumption. Hence, retrofitting and replacement of these units to minimize energy consumption is expected to bolster growth of the commercial segment.

Regional Insights

Based on regions, the HVAC equipment market can be segmented into North America, Europe, Asia Pacific, South America, and Middle East and Africa. Europe is driven by the presence of substantial real estate and tourism industry in the region. The commercial HVAC units dominate the North American and European market owing to the well-established service industry and growing real-estate sector. Implementation of stringent government norms, rising construction activities, and a stable industrial base are anticipated to drive the market in these regions.

Asia Pacific dominates the industry owing to the climatic conditions, growing populace, disposable income, desire for better comfort, and urbanization in developing economies. China, Japan, and India collectively contribute to more than 60% of the total regional sales. Collaboration between regulatory bodies and industry experts to create awareness regarding star-labelled HVAC units coupled with favorable government initiatives promoting the use of advanced energy efficient units in old and new buildings will boost the market growth.

HVAC Systems Market Share Insights

The market is characterized as a highly competitive market owing to the presence of numerous prominent players such as Mitsubishi Electric Corp., Arkema S.A., LG Corporation, Lennox International, Inc., Carrier Corporation, Samsung Electronics, and Daikin Industries Ltd. among others. HVAC equipment are an essential part of industrial, commercial, and residential structures and therefore, used across these buildings to control and manage temperature, fresh air intake, humidity, and air quality.

Air conditioning systems dominate the market for heating, ventilation, and air conditioning with the annual consumption of more than 100 million units worldwide. Manufacturers invest heavily in R&D to manufacture cost effective, energy efficient and innovative products. Furthermore, market players focus on mergers and acquisitions or forming strategic partnerships with smaller firms to augment their product portfolio and to gain a larger market share. For instance, Mitsubishi Electric Corporation acquired DeLclima S.p.A in March 2016, enabling the former to enter the chiller business and augment their market presence.

Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2015 to 2025. For the purpose of this study, Grand View Research has segmented the global HVAC system market report on the basis of product, end use, and region:

• Product Outlook (Revenue, USD Billion, 2015 - 2025)

  • Heating

  • Ventilation

  • Cooling

• End Use Outlook (Revenue, USD Billion, 2015 - 2025)

  • Residential

  • Commercial

  • Industrial

• Regional Outlook (Revenue, USD Billion, 2015 - 2025)

  • North America

    • U.S.

    • Canada

    • Mexico

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

    • Spain

  • Asia Pacific

    • India

    • China

    • Japan

    • South Korea

    • Australia

  • South America

    • Brazil

    • Argentina

    • Chile

  • Middle East & Africa (MEA)