The air conditioner market poised for a 9 percent annual growth over the next couple of years, is witnessing a steady shift in demand for integrated systems.
With advancements in air conditioning technology and rising demand in both developed and developing regions, the air conditioning systems market is expected to experience high growth in the coming decade. Rising disposable incomes of consumers, the need for replacement of obsolete systems, increasing awareness of energy-efficient and eco-friendly products, and demand for intelligent air conditioning systems are some of the factors providing impetus to demand.
Technavio has identified four key trends that are expected to impact the air conditioning market over the next four years:
- Increased popularity of smart thermostats
- Fast adoption of inverter air conditioners
- Greater demand for integrated systems
- Introduction of air-purifying technology
Rise of smart thermostats. Smart thermostats have been growing in popularity over the past few years and this is set to continue in both residential and HVAC commercial markets. These pieces of equipment allow for temperature monitoring at home, or in commercial spaces, via devices such as mobiles or PCs.
Indoor environments are monitored by the thermostat, which modifies heating and cooling cycles for increased energy efficiency and financial savings. Smart thermostats are rapidly advancing in terms of the technology used too.
Inverter air conditioners gain popularity. Inverter air conditioners will see rapid global adoption between 2017 and 2020. Inverter-type air conditioners reduce energy usage by up to 30 percent, and are not much expensive to install, which may explain why adoption rates are set to increase. This type of air conditioner utilizes a variable speed compressor. This switches off once the desired temperature is reached but switches on again when the climate changes.
So far, Japan has the highest ratio of inverter-type systems, covering the whole residential air conditioning market. Latin America and Europe are also demonstrating faster adoption rates. As such, global manufacturers and vendors are expanding their line-ups to cope with this predicted increase in demand. Further technological features, such as sleep-state technology where sensors detect when users fall asleep and optimize the temperature accordingly, are also being introduced, which is further expected to increase the popularity of inverter air conditioners.
Growing demand for integrated systems. Streamlined HVAC control and building systems have become more widespread and, as such, demand among end-users who want the benefits of a fully integrated system is growing. These systems also include lighting and access controls.
Why the increase in demand? Chiefly, energy efficiency is increased in integrated building management systems as they are controlled via a single interface. Redundancy is eliminated, while better management allows for increased occupancy comfort levels. For example, access controls combined with integrated HVAC controls provide users with a single platform for monitoring of cooling and can adjust temperature levels based on the number of people in the conditioned environment. Integrated systems have already seen increased adoption in commercial offices while gaining popularity in hotels, health care facilities, schools, and retail stores.
Global introduction of air-purifying technology. A number of leading manufacturers are integrating air-purifying technology into their existing air conditioning ranges. In an intensely competitive market, such as HVAC, this trend helps provide value-added benefits to customers as well as differentiating vendors’ products in an already crowded landscape.
The Indian market is projected to grow at a CAGR of 9.48 percent over the next four years. Growing urbanization is fuelling the construction of retail, hospitality, and commercial properties and, in turn, expanding the market. As a result of the growing momentum toward smart cities, it is expected that the demand for air cooling systems will continue to grow.
North, northwest, and central India contribute over one-third of AC sales in the country. In India, six major cities account for almost 80 percent sales of room air conditioners. Delhi is the largest market in northern India while Hyderabad is the largest market in southern India, followed by Chennai and Bangalore. In room air conditioning segment, the market share of window air conditioners has been witnessing a continuing decline over the last few years on account of decreasing price gap and lower energy efficiency in comparison with split air conditioners.
On the global front, characterized by the presence of a number of global, regional, and local air conditioning manufacturers, the market appears to be fragmented. It is anticipated to post a CAGR of almost 9 percent by 2021. The rise in residential construction activities is one of the major factors that will have a positive impact.
The economic growth and increasing urbanization in several countries in the APAC, Latin America, and the Middle-East will also accelerate the demand for new homes, which will increase the need for healthcare, retail, and other commercial segments, in turn, boosting the demand for air conditioning units.
The integration of HVAC controls and building systems will lead to higher energy efficiency in building management and also facilitate the elimination of redundancy in systems that help in providing better occupant comfort. As a result, players in the construction industry will start preferring integrated building management systems, which will be one of the major trends that will gain traction in this market in the next few years.