Air conditioning systems play a vital role in maintaining thermal comfort levels in residential and commercial spaces. Air conditioning systems are essential for indoor temperature and humidity control and find widespread applications in the residential, commercial, healthcare, industrial and automotive sectors. In the residential sector, air conditioning systems are installed in homes, villas and apartments to maintain optimal indoor climate. In the commercial sector, air conditioning systems are used in offices, malls, hotels, restaurants and other establishments. The global air conditioning systems market is estimated to be valued at US$ 293977.64 Mn in 2023 and is expected to exhibit a CAGR of 7.4% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics
Growing Construction Industry
As mentioned in the heading, the growing construction industry around the world is expected to drive the demand for air conditioning systems over the forecast period. Rapid urbanization and infrastructure development have boosted construction activities in emerging economies such as China, India, Indonesia and Brazil in recent years. With increasing construction of residential and commercial buildings such as malls, hospitals, hotels and office spaces, the need for efficient cooling and temperature/humidity control has surged globally. This is positively impacting the sales of air conditioning systems.
Increasing Demand from the Automotive Sector
Another factor propelling the air conditioning systems market growth is the rising installation of air conditioning systems in vehicles. In hot tropical regions, air conditioners have become a standard feature in vehicles. With increasing disposable income, more consumers opt for vehicles with air conditioning systems for enhanced comfort during travel. Rapid motorization and automotive production in developing countries are fueling the demand for automotive air conditioning systems. The trend towards comfort and luxury features in vehicles is complementing the market expansion.
Segment Analysis
The air conditioning systems market can be segmented by type, which include split systems, packaged systems, chillers, and others. Of these, split systems dominate the market, accounting for more than 50% of the share. This is because split systems provide more flexibility in terms of installation and are hence preferred for residential as well as light commercial applications. Split systems are ideal for hot regions as both indoor and outdoor units can be placed separately for maximum cooling.
PEST Analysis
Political: Government regulations regarding energy efficiency and refrigerant usage have boosted demand for eco-friendly air conditioners. Subsidies and tax incentives are offered in some countries to promote adoption.
Economic: Rising disposable incomes and rapid urbanization in developing countries have increased sales. However, high initial costs may restrain market growth.
Social: Growing awareness about health benefits of ambient temperatures aid sales. Consumers prefer products from trusted brands for durability, performance and warranties.
Technological: Demand for smart and connected devices with WiFi control and voice command features is increasing. Manufacturers focus on developing eco-friendly and energy-efficient products to meet sustainability goals.
Key Takeaways
The Global Air Conditioning Systems Market Size is expected to witness high growth.
Regional analysis: North America dominates the market currently due to rapid infrastructure development and rising sales of premium vehicles. However, Asia Pacific region is expected to witness fastest growth due to rising construction activities and increasing spending power in developing countries such as China and India.
Key players operating in the air conditioning systems market are Jazz Pharmaceuticals, Inc. (Ireland). Manufacturers focus on developing technologically advanced solutions and expanding dealer networks to strengthen market presence. They also vie for government projects and adopt organic and inorganic strategies like mergers, acquisitions and collaborations for business expansion. Rising environmental awareness has pushed them to launch eco-friendly products with lower refrigerant usage and energy efficiency.