Air Conditioning Equipment Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

The Air Conditioning Equipment Market is segmented by Type (Split system (Ducted and Ductless), Variable Refrigerant Flow, Air Handling Units, Chillers, Fan Coils, Indoor Packaged and Roof Tops), End-user Industry (Residential, Commercial, Industrial), and Geography.

Market Snapshot

Air Conditioning Equipment Market Size
Study Period: 2022-2027
Base Year: 2021
Fastest Growing Market: Asia-Pacific
Largest Market: North America
CAGR: 5.17 %
Air Conditioning Equipment Market Major Players

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Market Overview

The global air conditioning equipment market is expected to grow at a CAGR of 5.17% during the forecast period, 2022-2027. With the outbreak of COVID-19, most commercial and industrial construction projects started to carry on at a slower pace, while some were canceled. Production lines at some HVAC manufacturers had to be put on hold for several weeks, and installers saw their new installation projects limited by sanitary guidelines. However, in European countries such as Italy, AHU sales benefitted from the increased ventilation demand due to COVID-19.

  • The increased supportive government regulations, including incentives for saving energy and replacing existing equipment with better-performing ones, drive market growth over the forecast period.
  • Moreover, the government actively promotes the fast development and integration of renewable and efficient cooling technologies through new laws and attractive incentives. This promotion has led to a significant market shift globally, with the cooling industry growing partly due to this.
  • Retrofitting older buildings with air conditioning is significantly difficult, especially if there is insufficient space to install ductwork. For facilities with space, the expense of these updates can be a bit high for end-users. The workaround on both ends is using ductless cooling units.
  • Commercial buildings could install these compact units virtually anywhere without requiring duct installations. Ductless HVAC units are also suitable for modern infrastructures dealing with holes and gaps in ductwork that cause air leaks. This factor is driving the need for ductless HVAC systems rather than paying for costly replacements.
  • Moreover, vendors in the market are introducing new products to replace traditional ones. For instance, in March 2022, Carrier launched AquaForce Vision 30KAV with PUREtec refrigerant, an R1234ze chiller designed for industrial applications such as pharmaceuticals, food manufacturing, chemicals, plastics, metal industries, and other applications that require ultra-reliable cooling up to -12 degrees Celsius.

Scope of the Report

The market study analyses the market trends and opportunities for different types of Air Conditioning equipments, such as Split Systems, Variable Refrigerant Flow, Air Handling Units, Chillers, Fan Coils, Indoor Packaged and Roof Tops, that are used in the various end-user industry application. Further, the study analyzes the impact of COVID-19 on the market players and its stakeholders across the supply chain.

By Type
Split System (Ducted and Ductless)
Variable Refrigerant Flow (VRF)
Air Handling Units
Chillers
Fan Coils
Indoor Packaged and Roof Tops
Other Types
By End-User Industry
Residential
Commercial
Industrial
By Geography
North America
Asia Pacific
Europe
Latin America
Middle East and Africa

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Key Market Trends

Split System is Expected to Have a Significant Growth

  • A split air conditioner consists of an outdoor unit and an indoor unit. In single-split systems, an interior and outdoor unit are connected by copper pipe. In multi-split systems, up to five indoor units of customer choice can be connected to one outside unit. The multi-split is appropriate for many rooms or large rooms and various climatic zones. The outdoor unit's small footprint and easy installation are major benefits.
  • The firms are collaborating to provide Energy efficient and climatic-friendly split air conditioners. For instance, in August 2021, The only room air conditioner models to receive Germany's stringent "Blue Angel" ecolabel are small propane (R290) split air conditioners made by Chinese appliance player Midea. . The Blue Angel certification, which was founded in 1978, is the oldest ecolabel in the world. It is owned by the German Federal Ministry for the Environment and administered by the Federal Environmental Agency (UBA). About 12,000 products carry the label, which applies to 120 different product classes.
  • Furthermore, Introducing Midea's All Easy Series R290 units is a tipping point. Portable R290 air conditioners made by Midea have been available in Europe for some time. The most often used appliances for cooling spaces globally are split air conditioners mounted on an exterior wall. The R290 split air conditioners from Midea are expected to disrupt the European market and spark a change that will lower the continent's energy use and greenhouse gas emissions.
  • In December 2021, Mitsubishi introduced a ductless mini-split system that offers air conditioning using boilers. Mitsubishi produces ductless heat pumps, essentially air conditioners that can operate in reverse, providing both heating and cooling. These can be used in homes with boilers as they do not require a ducting system. Rather, they have a separate indoor unit that blows out the cold air.
  • Furthermore, in May 2022, Johnson Controls-Hitachi introduced a new Wall Mount indoor mini-split unit as the latest addition to its PRIMARY P300 line of high-efficiency, single-zone commercial mini-split systems. This ductless heating and cooling system are developed to address the particular requirements of small to medium-sized spaces, such as retail establishments, dining establishments, and educational facilities. The new Wall Mount unit is small and light, and the entire series of Hitachi PRIMARY mini-split systems have several mounting possibilities, making installation for contractors easier. Long pipe adds to the layout freedom, and a large capacity range ensures a system is precisely the right size for any application. To satisfy client needs and applications.
Air Conditioning Equipment Market Share

Europe is Expected to Hold Significant Market Share

  • European Union is taking various initiatives and introducing projects to reduce energy consumption and lower direct emissions. The new solutions are being introduced which are technically feasible and comply with the most stringent European safety standards. For instance, in August 2021, The European Union-funded Life-Zero GWP project developed the first high-efficiency double-ducted propane (R290) air conditioner with no outdoor unit. The new mono-block INNOVA 2.0NR has a compact design along with a reduced energy consumption and lower direct emissions. Each refrigeration circuit uses less than 150g of R290, keeping the units in compliance with European safety standards.
  • In June 2021, Mitsubishi Electric announced that it would invest USD 18 million to expand air conditioning production in Turkey to meet European demand for its air conditioning and heat pump systems. The planned investment will be made at the company’s 40,000 m2 production site in Manisa. Production rates at the factory are expected to increase to one million units annually from October 2021 to meet European demand for its products.
  • The expanding construction industry, loosening regulations in the real estate and construction sectors, significant potential for energy savings, and low and simple maintenance needs of air conditioning systems are all major factors propelling the market for air conditioning systems. For instance, According to Eurostat, Construction output in European Union increased by 3% in April of 2022 over the same month in the previous year. Furthermore, The production value of the construction industry in European countries in 2020 varied drastically per country. That year, Germany recorded the largest production value at roughly EUR 379 billion, followed by France at EUR 303 billion. In 2020, the annual turnover of the EU-27 countries amounted to almost EUR 1.7 trillion.
  • To expand their presence and capture a wide market share, the companies are launching and making available in Europe. For instance, in February 2021, Carrier introduced its XCT7 VRF air conditioning system in Europe. The range includes sizes from 4 to 26hp in single- and dual-fan, side discharge, top discharge, and full discharge heat recovery heat pump units. To achieve 104 horsepower with up to 64 indoor units per outside system, up to four outdoor units can be coupled. Twelve indoor units are offered, including round-way, 1-, 2-, and 4-way cassettes. Innovative features include a centrifugal oil separator that improves refrigerant distribution balance, a black-coated fin technology that increases corrosion resistance, anti-liquid shock compressor technology that lowers the failure rate from liquid shock, and a 10-stage oil return technology that ensures a smooth supply of lubricant.
  • Furthermore, in May 2021, the rhoss spa introduced WinPACK ECO, a new range comprising air-cooled water chillers and reversible heat pump products with scroll compressors and R32 ecological refrigerant gas. The new product range offers a cooling capacity from 150 to 350 kW and is available in the T and Q versions in nine sizes of chillers and reversible heat pumps.
Air Conditioning Equipment Market Growth

Competitive Landscape

The global air conditioning equipment landscape is highly competitive, with several local and international players active in the market. International participants operate in the country through partnerships with local players. With the market expected to broaden and yield more opportunities, more players are expected to enter the market soon. The key players in the market studied include Mitsubishi Electric, and Johnson Controls, among others. These major players have adopted various growth strategies, such as mergers and acquisitions, new product launches, expansions, joint ventures, partnerships, and others, to strengthen their position in this market.

  • March 2022 - Azizi Developments, a private developer in the UAE, extended its agreement with Daikin to supply high-end cooling equipment for the third phase of Riviera in MBR City. Daikin will provide HVAC systems comprising air-cooled chillers, fan coil units, and fresh-air handling units.
  • May 2021 - Johnson Controls announced they selected R-454B as a future refrigerant for new HVAC equipment. It is a lower global warming potential (GWP) refrigerant to replace R-410A in its ducted residential and commercial unitary products and air-cooled scroll chillers.

Recent Development

  • May 2022 - Vancouver City Council approved a policy as part of a broader strategy of growing the municipal government’s zero-emissions buildings requirements. Starting in 2025, builders will be required to install mechanical air cooling equipment in all new multi-family homes within the City of Vancouver.

Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumption And Market Definition

    2. 1.2 Scope of the study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.2.1 Bargaining Power Of Suppliers

      2. 4.2.2 Bargaining Power Of Buyers

      3. 4.2.3 Threat Of New Entrants

      4. 4.2.4 Threat Of Substitutes

      5. 4.2.5 Intensity Of Competitive Rivalry

    3. 4.3 Industry Value Chain Analysis

    4. 4.4 Impact of Covid-19 on the market

  5. 5. MARKET DYNAMICS

    1. 5.1 Market Drivers

      1. 5.1.1 Replacement of Existing Equipment With Better Performing Ones

      2. 5.1.2 Supportive Government Regulations Including Incentives for Saving Energy Through Tax Credit Programs

    2. 5.2 Market Challenges

      1. 5.2.1 Dependence on Macro-economic Conditions

  6. 6. MARKET SEGMENTATION

    1. 6.1 By Type

      1. 6.1.1 Split System (Ducted and Ductless)

      2. 6.1.2 Variable Refrigerant Flow (VRF)

      3. 6.1.3 Air Handling Units

      4. 6.1.4 Chillers

      5. 6.1.5 Fan Coils

      6. 6.1.6 Indoor Packaged and Roof Tops

      7. 6.1.7 Other Types

    2. 6.2 By End-User Industry

      1. 6.2.1 Residential

      2. 6.2.2 Commercial

      3. 6.2.3 Industrial

    3. 6.3 By Geography

      1. 6.3.1 North America

      2. 6.3.2 Asia Pacific

      3. 6.3.3 Europe

      4. 6.3.4 Latin America

      5. 6.3.5 Middle East and Africa

  7. 7. COMPETITIVE LANDSCAPE

    1. 7.1 Company Profiles

      1. 7.1.1 Daikin Industries, Ltd.

      2. 7.1.2 Hitachi Ltd.

      3. 7.1.3 Electrolux AB Corporation

      4. 7.1.4 Mitsubishi Electric Corporation

      5. 7.1.5 Johnson Controls

      6. 7.1.6 Haier Group

      7. 7.1.7 Carrier Corporate

      8. 7.1.8 Panasonic Corporation

      9. 7.1.9 Alfa Laval AB

      10. 7.1.10 Lennox International Inc

    2. *List Not Exhaustive
  8. 8. INVESTMENT ANALYSIS

  9. 9. FUTURE OF THE MARKET

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Frequently Asked Questions

The Air Conditioning Equipment Market market is studied from 2022 - 2027.

The Air Conditioning Equipment Market is growing at a CAGR of 5.17% over the next 5 years.

Asia-Pacific is growing at the highest CAGR over 2021- 2026.

North America holds highest share in 2021.

Daikin Industries, Ltd., Hitachi Ltd., Johnson Controls, Electrolux AB Corporation, Mitsubishi Electric Corporation are the major companies operating in Air Conditioning Equipment Market.

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