Automotive HVAC Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Growing concerns about global warming have slightly impacted the automotive HVAC market. Consequently, many nations worldwide, have started taking measures to reduce their carbon footprints.

According to the guidelines imposed by the European Union in 2013, vehicle refrigerants with a global warming potential greater than 150 in new passenger and commercial vehicles have been banned beginning January 1, 2017. Hence, the European automobile manufacturers were legally required to use an eco-friendly refrigerant in HVAC systems installed in the cars.

Not only Europe but also countries, such as Japan, China, and India, have supply agreements with manufacturers producing green refrigerants. Nations, like South Korea and Turkey, may witness a rapid increase in the application of eco-friendly refrigerants, owing to their inclination toward the average fuel economy standards of the EU.

Improving road infrastructure and rising disposable income of the middle-class group have been driving the automotive market in some developing countries.

The governments across the world have been taking initiatives to boost the passenger car sales by revising the tax rates, managing the inventory, etc., which may further contribute toward the growth of the HVAC market over the forecast period.

Owing to the considerable growth in population, as well as economic development in countries like China, India, Japan, and ASEAN countries, the automotive industry in Asia-Pacific is projected to record growth at a faster pace.

According to a recent study by the International Energy Agency (IEA), passenger car ownership in India is expected to grow by 775% from 2016 to 2040. The Indian government has been aiming to make automobile manufacturing the main driver of ‘Make in India’ initiative, as it expects the passenger vehicles market to triple to 9.4 million units by 2026, as highlighted in the Auto Mission Plan (AMP) 2016-2026. Thus, the growing demand for cars, as well as a conducive environment for the automobile industry, is expected to boost the ancillary industries, which include HVAC systems.

Also, owing to the increasing luxury car market share, foreign luxury carmakers, such as Volkswagen, Volvo, and Audi, have been planning new investments in different Asia-Pacific countries, thereby, driving the advanced HVAC systems required for high-end cars. A surge in demand is expected for refrigerated vans, as cold supply chain management is also likely to witness a boost in demand.