Air Conditioning Market - An Analysis of the Global Scenario

Published On : Jul 28, 2014

There are a variety of types of air conditioning systems in the air conditioning market. The segmentation of the air conditioning market depends upon the applications and the spaces that they occupy. The common ones include: split systems, ducted systems, non-ducted systems, single packaged systems, portable systems and window systems. 
Amongst these systems, the market segment of portable air conditioning systems is particularly popular in countries in Europe and North America. This is majorly because the cooling capacities of such systems go well with the environmental conditions of these regions. 
In 2012, nearly 973 thousand units of portable air conditioning systems were sold in North America, reflecting the size of the air conditioning market here. By 2018, market of this AC market segment is expected to observe growth at a compound annual growth rate of 10.25, making the demand rise to 1,744 thousand units. The market for air conditioners is growing at a healthy pace in several emerging economies with warm weather conditions. 
Split air conditioning systems are more popular in geographic regions with extreme weather conditions. This is because such ACs provide better temperature control and go well with extreme weather conditions such as extremely high or low temperature.   
An overview of the air conditioning system
The air conditioning market comprises many segments and sub-segments. Air conditioning (AC) refers to any mechanism or process that controls indoor air environments by providing thermal comfort and a suitable indoor air quality (IAQ) for occupants. As people now spend nearly 80-90% of their time indoors, the need for a comfortable and healthy indoor environment is rising as it has important effects on work efficiency and human health. 
The factors that affect any indoor environment majorly include temperature, humidity, ventilation, air exchange rate, particle pollutants, gaseous pollutants and air movement. Air conditioners are commonly seen in commercial and residential buildings, industrial spaces, sports stadiums, many types of transportation equipments and vehicles. 
Everybody knows that when natural climate is hot, ACs cool the air and when the climate is cold, ACs warm the air. But ACs do more than just these commonly known jobs. 
The AC market has a number of growth drivers. People purchase air conditioners for:
  • Adding or removing moisture to or from the air as and when required
  • Controlling air movement which indirectly helps in cleaning air by bringing fresh air in the indoors and pushing out stale air
  • Stabilizing the controlling the flow of air in the indoors
The air conditioning market is majorly driven by factors such as the need for replacement of older devices in developed countries in North America and Europe, the rising awareness about environment-friendly and energy efficient devices and rising demands for smart air-conditioning devices from economically developed regions of the globe. This will create new opportunities in the air conditioning market.
Major fractions of population in developing countries are expected to observe significant growth in their disposable earnings. This is expected to increase the number of new residential projects with luxury and lifestyle amenities, which would directly have a positive effect on the AC market.   
Demands for comparatively newer varieties of AC devices based on solar and inverter systems are expected to witness significant boost in the coming years owing to their energy-efficient features. Industry verticals such as the manufacturing sector and enterprises of small to medium range are also key drivers of the global air conditioning market.
Global leaders:
The global air conditioning market is characterized by a number of large and small players. Some of the most active shareholders of the AC market are: LG electronics, Lloyd systems, Daikin Industries Ltd., Samsung Electronics, Carrier, Panasonic, Carrier, Haier Electronics Group Co. Ltd, Hitachi Ltd., Mitsubishi Corporation, and many more.
Due to the dominance of these international players in most geographic regions in the AC market, this market is rather difficult for small players to enter or survive. For consolidating their lead positions, these air conditioning market leaders also widely follow merger and acquisition strategies.