Central Air Conditioning Market Size, Share & COVID-19 Impact Analysis, By Type (Split System, Packaged Unit, and Rooftop System), By Application (Residential and Commercial) and Regional Forecast, 2020-2027

The global central air conditioning market size stood at USD 32.94 billion in 2019 and is projected to reach USD 58.79 billion by 2032, exhibiting a CAGR of 4.2% during the forecast period. The Asia Pacific dominated the central air conditioning market with a share of 35.37% in 2019.

The increasing government and private sector investments in new construction & infrastructure projects, including hospitals, hotels, airports, and multiplexes is accountable to the growth of the market. These systems are installed at commercial places to distribute cooled air to and from rooms by one or more fans and ductwork. Central air conditioning systems are inclusive of filters that help improve the quality of air, and thus eliminate dust, pollen and lint from the air. Moreover, several advantages of these systems such as reduced noise, effective circulation, and easy operability is supporting the product demand.

MARKET TRENDS

Rising Implementation of Smart Central Air Conditioning Systems

The IoT enabled smart air conditioning systems are gaining popularity owing to their advantages such as enhanced comfort, smart scheduling, cost-efficiency, and milt-zone support. Companies are developing new systems with these advanced technologies to increase overall product efficiency and enhance the customer satisfaction. For instance, in April 2018, Chinese brand Haier announced the launch of their heat pump magnetic levitation (magnetic) central air-conditioner. The new system is integrated with novel technologies such as the E+ cloud service big data platform and other IoT technologies to analyze user needs and habits, as well as achieve energy conservation, and self-control throughout the product lifecycle.

MARKET DRIVERS

Increasing Inclination of Consumers Towards Energy-Efficient Systems

Key manufacturers in the market are opting for technological solutions that have less energy consumption with high efficiency. The governments and associations such as Energy Star, Air-Conditioning, Heating and Refrigeration Institute (AHRI), and many more recognize efficient products annually across the market, so as to introduce better products to the regular customers. Several companies are working on minimizing the energy consumption in comparison with the standard air conditioner, owing to the rising need for central air conditioning systems in residential as well as the commercial applications. Energy Star certified products are expected to be the best and energy-efficient product, as the agency testifies the products efficiency, henceforth increases the demand for energy-efficient central AC system and drives the market globally.

High Investments in Developing New Commercial Spaces

Governments of developing countries are initiating and authorizing various new commercial construction plans, due to emerging local, regional and global market players and their commercial operating spaces. Moreover, Daikin’s manufacturing plants can be located in Asian countries namely India and China, with increasing need for commercial place to operate the entire business across the region or country, which in turn will lead to a high product demand in the coming years. Similarly, the Indian government is expected to invest USD 1 trillion in housing sector over the forecast period; this, in return is projected to boost the demand for residential central AC.

MARKET RESTRAINT

Rapid Spread of COVID-19 Hinders the Market Growth Globally

The recent outbreak of COVID-19 is anticipated to hamper the market growth over coming years. Government authorities across the globe are advising people to not use the air conditioning systems, as it help in spreading the virus, restricting the product adoption. Moreover, owing to the increasing spread of COVID-19, governments are imposing stringent lockdowns in counties, which is slowing the overall economic conditions. This has impacted the new purchase decisions of organizations, thus hampering this market.

However, with the eradication of this pandemic disease, government across several countries are expected to implement certain initiatives that can help to overcome their economic downfall. As a result, these countries are anticipated to regain their stability. This can help the central AC manufacturers to enhance their productivity and increase the sales growth over the forecast period.

SEGMENTATION

By Type Analysis

Split System to Clutch Highest Market Share in the Forecast Period

The global market for this is segmented on the basis of type, which is further sub-segmented into split system, packaged unit, and rooftop system.

Split air conditioning system is projected to account for the highest market growth due to the rising demand for residential and commercial complexes across the globe. Single split systems are preferred in residential usage wherein the multi split systems are used for both residential and commercial applications. The variable refrigerant flow system (VRF) is one of the key multi split air conditioner used in commercial spaces.

Moreover, the rooftop system is expected to witness progressive market growth, as this system is becoming the primary necessity of commercial offices, airports, entertainment places and many more. Rooftop system offers a wide area cooling facility with high energy-efficiency, hence becoming the preferred choice for commercial applications. Furthermore, the packaged unit is anticipated to witness significant market growth with respect to the rooftop systems, as these units are embedded in restaurants, telephone exchange, small halls etc. with limited cooling area feature.

By Application Analysis

Commercial Application to Witness Highest Growth Rate in the Near Future

By application, the market is bifurcated into residential and commercial sector.

The commercial sector is expected to witness exponential market growth owing to the rising government and private organizations investments in commercializing the developing and developed economies. Airports, theaters, commercial buildings are entirely integrated with centralized air conditioning units across the globe, therefore boosting the growth of the market.

Furthermore, the residential application segment witnesses significant market growth owing to the limited usage in residential rooms and small halls. In the current scenario, it is observed that the governments of developing economies are investing in housing plans, thus contributing to market growth of central air conditioners in the residential sector.

REGIONAL ANALYSIS

Geographically, this market is categorized into North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.

The increasing number of commercial buildings in several Asia Pacific countries, including India, China, and Japan are expected to aid the central air conditioning market growth over the forecast period. Construction contractors are deploying central systems in building to reduce the electricity consumption and enhance the building energy efficiency, driving the Asia Pacific market. Moreover, the increasing number of manufacturing activities in China and India will elevate the market over the forecast timeline. Several system manufacturing companies are developing their manufacturing plants in these countries owing to low labor and raw material cost.

The increasing consumer disposable income level in North America is expected to propel the regional market growth for central air conditioning. Consumers in the U.S. and Canada are increasingly spending in replacing traditional air conditioner systems with central systems to enhance the air flow efficiency and reduce the total electricity consumption, attributing to market growth. According to the U.S. Department of Energy, ENERGY STAR and Energy Guide labels qualified residential central air conditioner units are about 15% more efficient than standard models, saving significant amount of energy, thus supporting product adoption.

Government authorities in Europe are making large investments in new smart city development projects. The European Union is anticipated to have over 300 smart cities by 2020, increasing the adoption of advanced air conditioning systems. Moreover, the increasing number of residential infrastructure projects, particularly in France, Russia and Germany will augment the market growth over the forecast timeline. However, the recent impact of COVID-19 in major European countries, such as Italy, France, UK, and Russia will hamper this market growth in 2020.

This market in MEA is witnessing a significant growth due to rising urban population and rising increasing private sector investments in developing new commercial buildings. Moreover, the increasing number of skyscrapers in UAE will contribute to this market growth over the forecast timeline. Moreover, the market in Latin America is anticipated to witness steady growth owing to the increasing government spending in developing new airports and railway stations. The Brazilian government is planning to develop about 22 new airports over coming years, supporting the market growth.

KEY INDUSTRY PLAYERS

Daikin and Lennox are Adopting Advanced Technological Systems to Improvise the Product Quality and Portfolio

Daikin and Lennox are adopting smart and advance technology to offer highly energy-efficient and easy accessible products to their customers globally. These organizations are presenting several technology driven products to cater their huge customer base along-with maintain their market value. Daikin is leveraging its cutting-edge technology for delivering outstanding system solutions and enhance the product portfolio.

• January 2020: Daikin’s DX18TC series with ComfortNet Control was recognised by the ENERGY STAR agency as an energy-efficient product, that offers high-efficiency for the residential central air conditioners with lifetime operating cost ranging between USD 1,666 to USD 3,418

List of Key Companies Profiled:

• DAIKIN INDUSTRIES, Ltd.


• Lennox International Inc.


• Carrier


• Blue Star Limited.


• Haier Inc.


• Mitsubishi Electric Corporation


• FUJITSU GENERAL


• Nortek Global HVAC


• Trane


• LG Electronics

KEY INDUSTRY DEVELOPMENTS:

• October 2019: Carrier introduced a new WeatherMaker Rooftop unit using i-Vu controls for protecting the historic theatres. This product is manufactured for renovating the historic 1928 Sandusky State Theatre by maintaining the indoor temperature


• April 2019: Daikin initiated the manufacturing facility of its new air conditioner series in India, aiming for strong sales target. The company planned on manufacturing 15 lakh residential air conditioners, 50,000 VRV units, 20,000 ductable units and 1,000 chillers respectively

REPORT COVERAGE

The report offers an elaborative analysis of numerous factors affecting the global central air conditioning market. These include opportunities, growth drivers, threats, key industry developments, and restraints. In addition to this, it further helps in analyzing, segmenting, and defining the market based on different segments such as type and applications. It strategically examines several strategies such as product innovations, mergers, alliances, joint ventures, and acquisitions adopted by players to gain a competitive edge in the market and attract high market revenue in the forecast duration.

Report Scope & Segmentation