Air conditioning systems market is estimated to witness high growth owing to rising construction activities and increasing consumer awareness
Global air conditioning systems market is estimated to be valued at USD 119.77 Bn in 2024, exhibiting a CAGR of 7.8% over the forecast period of 2024-2031. Growth in construction activities, especially in developing countries across regions such as Asia Pacific and Middle East & Africa is expected to drive the demand for air conditioning systems. Furthermore, rising consumer awareness about energy-efficient cooling solutions along with increasing disposable income is also contributing to the market growth.
Market Dynamics:
The growth of the global air conditioning systems market is determined by two key drivers - rising construction activities and increasing consumer awareness. Rapid urbanization has fueled construction of residential, commercial and industrial infrastructures which in turn is boosting the sales of air conditioning systems for space cooling and temperature control applications. At the same time, consumers are increasingly opting for energy-efficient air conditioners due to greater environmental consciousness and potential cost savings over time. Leading manufacturers are heavily investing in research and development to create innovative products that harmoniously balance performance, cost, and energy efficiency, thereby capitalizing on the growing consumer demand for such products.
Market Drivers
Increasing Temperatures Due to Global Warming
One of the key drivers for the air conditioning systems market is the rising temperatures around the world due to the increasing effect of global warming. As the earth's average surface temperature continues to rise each year, the demand for air conditioning systems is also increasing significantly. The increased carbon emissions from human activities are trapping more heat in the lower atmosphere and near the Earth's surface. This is resulting in hotter summers with higher temperatures in most parts of the world. As temperatures keep rising, more people and businesses are installing air conditioning systems to cool themselves.
Growing Construction Industry
Another major market driver is the steady growth being witnessed in the global construction industry. Whether it is homes, commercial buildings, hospitals or other structures, air conditioning systems have become essential in modern construction projects. As urbanization is on the rise with more people shifting to cities, the demand for residential and commercial construction is booming. Most buildings being developed today have centralized or packaged AC installations. The thriving construction sector ensures continuous demand for cooling equipment, ducts, grills and other components that are required to install efficient air conditioning solutions.
Market Restraints
High Initial Investment
One of the key challenges faced by the air conditioning systems market is the relatively high initial investment required to purchase and install these units. While AC prices have declined over the past decade due to technological advancements, the upfront expenditure on a good quality residential or commercial system can still be quite high. This high initial cost deters some potential customers, especially home owners and small businesses, from immediately investing in air conditioning solutions. The service and maintenance costs over the lifespan of the system also need to be accounted for.
Shift Towards Green Buildings
Another restraint for the market is the increasing focus on greener and more sustainable construction practices globally. With growing environmental awareness, building developers are prioritizing the use of natural ventilation and passive cooling techniques in commercial spaces. There is also a shift happening towards the use of renewable energy sources for powering buildings. These trends could potentially reduce dependency on conventional air conditioning in the long run. While green construction is still in a growing phase, it remains a key challenge for the air conditioning sector.
Market Opportunities
Rise of Smart AC Technology
One of the promising growth opportunities for market players lies in capitalizing on the rise of smart home technology. There is soaring demand for WiFi-enabled smart air conditioning systems that can be controlled remotely using smartphones and devices. Integration of IoT sensors allows real-time monitoring of indoor climate and automatic temperature adjustment. Smart ACs with advanced features like voice command options, self-diagnostics and remote troubleshooting are gaining popularity.
Growing Infrastructure Development
Rapid infrastructure development projects across both developed and developing nations also present major market opportunities. Mega construction initiatives around rail, road, metro and other public utility networks require centralized temperature control solutions for various sites. Moreover, modernization and expansion of existing airports, hospitals and large commercial buildings offer prospects for retrofitting with advanced air conditioning infrastructure. Tying up with major construction players to supply cooling needs of infrastructure projects can drive significant business growth.
Link: https://www.coherentmarketinsights.com/market-insight/air-conditioning-systems-market-4687
Key Market Developments:
- On May 23, 2024, Whirlpool Corporation, a multinational manufacturer and marketer of home appliances launched its new 2024 Air Conditioner range, featuring 6th Sense IntelliCool Technology, which provides a seamless and personalized cooling experience by intuitively sensing and adapting to consumers' needs. This cutting-edge technology ensures that daily moments are truly enjoyable and comfortable by dynamically adjusting temperature, humidity, airflow, and air direction to deliver optimal comfort levels with maximum energy efficiency.
- On May 18, 2024, Laneturn Air Conditioning Brand, offering innovative and reliable air conditioning solutions introduced its inaugural product, the True Inverter Series Split Air Conditioner, a groundbreaking innovation that marks a significant milestone in its mission to revolutionize comfort and reliability in the air conditioning systems market. This cutting-edge series, available in 1-ton, 1.5-ton, and 2-ton variants, represents a significant leap forward in cooling technology, engineered to surpass industry standards and deliver unparalleled efficiency and performance.
- On April 30, 2024, Johnson Controls-Hitachi Air Conditioning, manufacturing a wide range of air conditioning products, including room air conditioners, VRF systems, and chillers launched its first cold-climate variable refrigerant flow heat pump available in North America. The high-efficiency air365 Max with HeatForce is a top-flow VRF heating and cooling system that delivers comfort, energy efficiency and easy installation and maintenance for professionals, architects and commercial building owners looking to reduce operational costs and carbon footprint.
- In March 2023, Daikin Industries, offering a comprehensive range of air conditioning solutions for residential, commercial, and industrial applications launched its new VRV IV S mini-split air conditioner series in North America, featuring several groundbreaking innovations, including a more efficient compressor, quieter operation, and a wider range of cooling and heating capacities to provide enhanced comfort and energy efficiency.
Key Market Players:
ALFA LAVAL, BSH Hausgeräte GmbH, Carrier Global Corporation, Daikin Industries, Ltd., Electrolux AB, Fujitsu General Ltd., Godrej Appliances, Haier Group, Hitachi Ltd., Jungheinrich AG, Lennox International, Inc., LG Electronics, Mitsubishi Electric Trane HVAC US LLC, Panasonic Holdings Corporation, Samsung Electronics Co., Ltd, Toshiba Corporation, Voltas, Inc., Whirlpool Corporation, Wotsco, Inc., Zanotti S.p.A.
