Air Conditioning System Market

Air Conditioning System Market Outlook (2024 to 2034)

Revenue from the global air conditioning system market size is estimated at US$ 135.4 billion in 2024 and is forecasted to rise at a CAGR of 4.8% to reach US$ 216.4 billion by the end of 2034.

High desire of consumers for pleasant and convenient air conditioning systems is driving manufacturers to continuously apply technical breakthroughs. It is predicted that the trend of portable and energy-efficient air conditioning systems becoming more and more popular will present the greatest prospects for white space evaluation carried out globally.

Air conditioning systems are used in a wide range of locations, including retail malls, residences, offices, and entertainment venues. Although the cost of ecologically efficient goods remains a major concern, air conditioning (AC) remains a highly sought-after commodity in underdeveloped nations. Particularly in hot and dry regions, air conditioning systems have significantly changed the interior atmosphere and are now a crucial component of the infrastructure supporting contemporary spaces. On top of that, over the next years, it is projected that demand for AC will expand bullishly as economic growth in emerging nations continues to soar, enhancing the situation and improving the air conditioning system market growth.

The market is projected to be influenced by factors such as the tourist and construction sectors' promising expansion. The rising popularity of portable systems and customer inclination toward energy-efficient systems are two other factors that are expected to support market expansion.

• Introduction of the Super-Efficient Air Conditioning scheme was announced by the Indian government. The program's objectives are to lower energy usage and encourage the adoption of energy-efficient technology. The Indian Ministry of Power also intends to address the country's Cooling Action Plan and Phase-out Management Plan for Hydrochlorofluorocarbons by 2032 through this initiative.

The market for air conditioners is growing at a steady pace as a result of the growing number of electronic spare parts manufacturers that assist air conditioner manufacturers in easily obtaining the spare components needed for air conditioner design and packaging. Customers are drawn to buy air conditioners and meet their needs by the introduction of new technological features like the Internet of Things, smart checking and changing systems, and other automation technologies, as well as by the industry's major players' marketing campaigns, contributing to the overall expansion of the air conditioning system market size.

Report Attribute	Detail
Air Conditioning System Market Size (2024E)	US$ 135.4 Billion
Forecasted Market Value (2034F)	US$ 216.4 Billion
Global Market Growth Rate (2024 to 2034)	4.8% CAGR
Canada Market Growth Rate (2024 to 2034)	5% CAGR
China Market Value (2034F)	US$ 27.8 Billion
North America Market Share (2024E)	22.9%
East Asia Market Share (2034F)	26.9%
Key Companies Profiled	Daikin Industries Ltd.; Mitsubishi; Qingdao Haier; Samsung Electronics; Electrolux; LG Electronics; Panasonic; UTC; Hitachi; Gree Electric Appliances; Sharp Corp.; Midea Group Co. Ltd.; Carrier Corp.; Fuji Electric; Honeywell International; Ingersoll Rand.

What is Complementing Air Conditioning System Market Growth?

“Advancements in IoT Technology and Focus on Creation of Smart HVAC Systems”

Market expansion is primarily fueled by the growth of the construction sector. Increased building activities are the main catalyst for the rising demand for HVAC systems in both residential and commercial markets. Urbanization, population growth, and industrial development have significantly boosted the expansion of the global construction industry.

• According to a survey by PICKHVAC, a company that reviews HVAC systems, 83% of participants stated that HVAC systems were crucial, with over 38% emphasizing the importance of system reliability when selecting HVAC equipment.

In recent years, the HVAC industry has undergone considerable transformations due to rapid advancements in the Internet of Things (IoT). IoT technology has facilitated the creation of smart HVAC systems that can be remotely controlled, monitored, and centrally managed. The swift adoption of IoT in the HVAC sector offers numerous opportunities for growth and innovation.

“Emphasis on Worker Comfort, Productivity, and Equipment Cooling”

Increasing population densities in urban areas with typical heat retention elevate the demand for air conditioning in homes, offices, and institutions. The rising awareness of the comfort and health benefits of air conditioning, such as enhanced indoor air quality, humidity control, and relief from heat-related health issues, is driving the demand for these systems in both residential and commercial settings.

As businesses prioritize worker comfort, productivity, and equipment cooling, the necessity for air conditioning in office buildings, retail spaces, healthcare facilities, data centers, and manufacturing plants is growing. This is fueling the market's expansion.

What’s Acting as a Challenge for Companies in the Market?

“Significant Energy Consumption and Greenhouse Gas Emissions”

As the world moves toward sustainability, the industry faces pressure to deliver eco-friendly and energy-efficient solutions. Additionally, to meet new regulations, the existing HVAC infrastructure in factories, buildings, and other facilities must be upgraded. Energy consumption and greenhouse gas emissions of air conditioning systems are significant, making it crucial to develop energy- and environmentally-efficient technologies. Furthermore, maintaining and repairing HVAC systems is challenging due to their outdated infrastructure.

“Elevated Expenses Shrinking Customer Base to Significant Levels”

Modern HVAC systems are replacing older ones due to their enhanced energy efficiency. These systems are now equipped with advanced technologies such as ice-powered air cooling, motion-activated air conditioning units, and intelligent vents to improve energy efficiency, lower energy costs, and reduce carbon emissions. The installation costs of energy-efficient HVAC equipment vary significantly based on several factors in residential, commercial, and industrial settings. These higher costs are causing some concern in the market.

Country-wise Evaluation

The AC system market in China is projected to expand at a CAGR of 4.9% from 2024 to 2034. The country is evaluated to occupy an air conditioning system market share of 47.8% in East Asia by 2034.

What is Making Canada a Lucrative Market for Air Conditioning System Suppliers?

“Increasing Demand for Low-GWP Refrigerants, VRF Systems, and Inverter Technology”

Attribute	Canada
Market Value (2024E)	US$ 3.3 Billion
Growth Rate (2024 to 2034)	5% CAGR
Projected Value (2034F)	US$ 5.3 Billion

Energy efficiency remains a high priority in the industry. In Canada, both consumers and businesses are increasingly seeking systems that reduce energy consumption and operating costs, which is a key air conditioning system market trend. Enhanced efficiency can be achieved through the use of low-global warming potential (GWP) refrigerants, variable refrigerant flow (VRF) systems, and inverter technology.

Multi-zone air conditioning systems, utilizing VRF technology and ductless mini-splits, are gaining popularity. These systems allow for precise zoning, minimizing energy waste and improving comfort levels throughout a facility.

Which Developments in Japan are Influencing Market Growth?

“Rise in Construction Projects and Establishment of New Data Centers”

Attribute	Japan
Market Value (2024E)	US$ 9.5 Billion
Growth Rate (2024 to 2034)	4.9% CAGR
Projected Value (2034F)	US$ 15.4 Billion

Market growth in Japan is driven by the expansion of the construction sector and the rise of data centers in the country. Demand for air conditioning systems in these facilities to maintain optimal temperatures has opened up new market opportunities.

Category-wise Analysis

Based on system type, demand for chillers is analyzed to escalate at a CAGR of 5% through 2034.

Which Type of System is Majorly Desired by Most Consumers?

“Stringent Regulations Boosting Demand for Energy-Efficient Split Air Conditioning Systems”

Attribute	Split Air Conditioning Systems
Segment Value (2024E)	US$ 49.4 Billion
Growth Rate (2024 to 2034)	4.8% CAGR
Projected Value (2034F)	US$ 78.8 Billion

One of the primary factors driving the market for split air conditioning systems is the strong demand for energy efficiency. Government regulations have prompted the replacement of older air conditioning units with energy-efficient models. These advanced systems represent the future of air conditioning technology.

Which is a Key End-use Segment of Air Conditioning Equipment?

“Air Conditioning Systems Ensuring Comfortable Indoor Temperature in Residential Settings”

Attribute	Residential
Segment Value (2024E)	US$ 53.1 Billion
Growth Rate (2024 to 2034)	4.9% CAGR
Projected Value (2034F)	US$ 85.5 Billion

Primary purpose of an HVAC system is to ensure that indoor temperature conditions are both healthy and comfortable for occupants. HVAC systems typically include a range of active mechanical and electrical technologies used to regulate a building's temperature. These factors are collectively driving sales in this sector.

Competitive Landscape

Key players in the air conditioning system market are adapting themselves to the evolving market trends such as portable air conditioners and wearable air conditioners.

• Daikin Industries, Ltd. invested in London, United Kingdom-based startup Wlab Ltd. in May 2022. Sensio Air, a division of Wlab Ltd., developed sensors to identify and detect airborne allergens by type while continuously monitoring them with artificial intelligence and Internet of Things technology.
• Mitsubishi Electric Corporation announced in April 2022 the creation of a new airflow-control technology that optimized comfort throughout space by analyzing and visualizing temperature distribution and airflow from air conditioning systems.
• Godrej Appliances demonstrated a novel use of anti-leak technology when they unveiled the first leak-proof split air conditioner in India in February 2023. This strategic use of anti-leak technology demonstrated the company's commitment to enhancing customer experience and developing an unrivaled value proposition in the air conditioning sector.
• At the 2022 AHR exhibition in Las Vegas, in January 2022, LG Electronics USA unveiled a wide range of ventilation, heating, and air conditioning products for use in light commercial, residential, and industrial applications.

Fact.MR provides detailed information about the price points of key air conditioning system suppliers positioned across the world, sales growth, production capacity, and speculative technological expansion, in this updated market report.

Key Segments of Air Conditioning System Market Research

• By Product Type :

  • Portable
  • Window
  • Split
  • Cassette
  • Single
  • Chiller
  • Airside

• By AC Type :

  • Unitary
  • Rooftop
  • PTAC

• By End Use :

  • Residential
  • Commercial
  • Industrial

• By Sales Channel :

  • B2B
  • Authorized Stores
  • Independent Electronic Stores
  • e-Commerce

• By Region :

  • North America
  • Latin America
  • Eastern Europe
  • Western Europe
  • East Asia
  • South Asia & Pacific
  • Middle East & Africa