Air Conditioning Market

The global air conditioning market size was valued at USD 117.4 billion in 2021 and is expected to surpass USD 198 billion by 2030, expanding at a CAGR of 5.9% during the forecast period, 2022–2030. The growth of the market is attributed to the rising development of new residential and commercial buildings along with the high spending on consumer electronic products.
 

Air conditioning or AC can be broadly described as a type of electronic device or appliance that is primarily designed to maintain or regulate the air condition in indoor spaces of a household or an office. In short, it is widely used to shield from extreme or unease weather conditions such as humidity, summer heat, and winter cold while providing comfort to people in a household or employees of an office by maintaining the certain temperature of the indoor environment.

The appliance is also extensively used as an air purity conditioning system across several commercial places such as corporate offices, shopping malls, theaters, hospitals, hotels, and resort centers. Some of the most popular AC systems include wall hung split or multi-head split systems, portable AC, window AC, and ducted AC, which are available in the different price ranges in the market depending on the quality and features equipped with the devices.

Among key drivers, the extensive use of ACs in all types of vehicles especially personal use cars and commercial vehicles present key factors fueling the demand for the appliance. At present, China is the largest market for ACs and has an annual demand of 30-40 million units, which is followed by Japan. As per Statista report, the total annual shipment figures of ACs usually fall between 3.5 and 6 million and the total ACs sold in 2020 was around 5.91 million units globally. However, the AC demand prior to the COVID-19 pandemic was much higher. For instance, in 2018, the global demand for ACs reached more than 110 million units.

The outbreak of the COVID-19 pandemic had posed a negative impact on the global air conditioning market expansion due to the prolonged shutdown of manufacturing units in the electronic industry. The pandemic had completely shattered the supply chain and forced it to delay the production of new ACs. Moreover, the lack of labor acted as a big threat to the production units of consumer electronic items. However, the market is expected to recover and return to its normal operation as the number of coronavirus cases increasingly subsided across the globe.

Market Trends, Drivers, Restraints, and Opportunities

• Growing disposable income of a large number of the global population and wide adoption of the devices in residential spaces are projected to propel the market in the coming years.
• Emergence of several new tourist spots, the rising number of frequent travelers, and the increasing development of luxury staying houses including villas are the main drivers of the market.
• Extreme weather conditions across many corners of the globe, impacted by global warming and climate change factors present other key factors boosting the market.
• Introduction of less energy consumption ACs and the development of cost-effective machines are projected to propel the market during the forecast period.
• High cost of maintenance, frequent regulation change regarding consumer electronic goods, and the absence of high penetration of ACs in rural areas of developing countries act as major hurdles that can hamper market expansion in the coming years.
• Rapid introduction of innovative techniques and increasing integration of technological upgrades such as advanced sensors and smart control systems offer lucrative opportunities for market growth.

Scope of the Report

The report on the global air conditioning market includes an assessment of the market, trends, segments, and regional markets. Overview and dynamics have also been included in the report.

Market Segment Insights

Popularity of single room AC systems drives the window AC segment

Based on types, the global air conditioning market is divided into window AC, portable AC, ductless multi-split, packaged AC, floor-mounted AC, central AC, variable refrigerant flow, and others. The window AC segment accounted for a key market share in 2021 and is expected to expand at a rapid pace during the forecast period owing to wide adoption of the device, especially for single rooms of a household. Wide spending on household development activities and increasing installation of a singer room AC system further boost the segment.

Online segment to register a considerable CAGR

On the basis of distribution channels, the market is bifurcated into online and retail shops. The retail shops segment is expected to hold a key share of the market owing to the wide establishment of retail shops, especially for electronic products, and the rapid establishment of specialty retail stores for electronic items such as TATA Croma in India.

On the other hand, the online segment is a fast-growing distribution platform and is projected to register a considerable CAGR during the forecast period due to rising consumers’ preference for online shopping as it offers heavily discounted prices of products and door-step delivery services.

Introduction of cost-effective ACs propels the automatic segment

Based on technology, the global air conditioning market is segregated into manual and automatic. The automatic segment is anticipated to hold a key share of the market in the coming years due to the rising introduction of cost-effective automatic ACs and increasing spending on expensive consumer items by a section of higher-income groups, especially in developed countries. Moreover, increasing the disposable income of a large section of the population in developing countries presents another key driver of the segment.
 

Commercial segment to register a healthy growth rate

On the basis of end-users, the market is segmented into residential, commercial, and industrial. The commercial segment is anticipated to register a healthy growth rate during the targeted period owing to the rising development of commercial buildings such as shopping malls, corporate offices, and lodging houses for tourists.

On the other hand, the residential segment is projected to hold a key market share in the coming years owing to the rising construction of residential buildings, impacted by a growing urban population, especially in developing countries. As per the International Monetary Fund (IMF) estimation, the global housing market is projected to reach more than 1.2 trillion in 2022 and this provides a crucial opportunity for the AC market expansion worldwide.

Asia Pacific is anticipated to constitute a key market share

In terms of regions, the global air conditioning market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. The market in Asia Pacific is expected to constitute a key share of the market during the projected period owing to the presence of key global players such as Daikin, Samsung, LG, and Voltas along with the increasing construction activities of residential buildings, which impacted by urbanization.

The presence of a large number of populations in the region had resulted in a surge in the demand for new residential areas, especially in China and India. Japan and China are the key markets for the product and have massive expansion potential for the market in the coming years.
 

Segments

Segments Covered in the Report

The global air conditioning market has been segmented on the basis of

Types

• Window AC
• Portable AC
• Ductless Multi Split
• Packaged AC
• Floor Mounted AC
• Central AC
• Variable Refrigerant Flow
• Others

Distribution Channels

• Online
• Retail Shops

Technology

• Manual
• Automatic

End-users

• Residential
• Commercial
• Industrial

Regions

• Asia Pacific
• North America
• Latin America
• Europe
• Middle East & Africa

Key Players

• Hitachi Ltd.
• Carrier Corporation
• Whirlpool Corporation
• Hitachi-Johnson Controls Air Conditioning Inc.
• LG Electronics Inc.
• United Technologies Corporation
• Blue Star Ltd.
• Haier Group Corporation
• Samsung Electronics Co., Ltd.
• Voltas Ltd.
• Daikin Industries, Ltd.

Competitive Landscape

Key players competing in the global air conditioning market are Hitachi Ltd.; Carrier Corporation; Whirlpool Corporation; Hitachi-Johnson Controls Air Conditioning Inc.; LG Electronics Inc.; United Technologies Corporation; Blue Star Ltd.; Haier Group Corporation; Samsung Electronics Co., Ltd.; Voltas Ltd.; and Daikin Industries, Ltd. Some of these key players engage in various business expansion strategies such as merger and acquisition, entering into partnerships or collaboration, launches of new products, R&D investment, and expansion of the production capacity to expand their product portfolio and increase their consumer base globally. For instance, in June 2021, Carrier Corporation announced its acquisition of Guangdong-based HVAC manufacturer, Giwee Group with the aim of expanding the former company’s geographic footprint to expand its product portfolio.