Global air conditioning market

Air conditioning; BSRIA; global air conditioning; chillers; VRF; Saziye Dickson

The recently published BSRIA market intelligence study on the global air conditioning (AC) market continued to show growth in 2018. Karen Fletcher looks at the figures.

The air conditioning market in the UK has been under pressure from a number of sources. These include F Gas regulations which are driving fundamental changes in refrigerants which in turn leads to new product development. We are also seeing more clients and end-users looking to upgrade air conditioning equipment to modern, energy efficient kit.

BSRIA’s market intelligence study looks at the air conditioning market across the globe, and sees a growing market for cooling and ventilation equipment, particularly in areas of the world where there has been small demand to date. Economic and population growth, urbanization and rising temperatures in countries such as Bangladesh, Brazil, Ghana, India, Indonesia, Kenya and Vietnam are the main drivers for increasing demand for cooling.

The European market also increased significantly. Customers’ preferences shifted towards energy efficiency models along with inverter ACs with greener technology. Americas and the Asia Pacific region showed moderate growth around the global average level of 3.8 per cent, while the Middle East, Indian and African markets continued to pick up slowly. Major markets such as China and US were showing modest increase.

The share of smart air conditioners, in particularly in the commercial sector, is increasing as these products enable a higher degree of monitoring and control of air quality. Wireless technology has become much easier to integrate. HVAC manufacturers continue to increasingly implement inverter technology, as well as offering fully integrated systems.

Companies are constantly seeking opportunities for new distribution channels, as well as expanding production facilities in certain regions to quickly introduce products which match local needs.

For 2018, BSRIA estimates global year-end sales of over 141 million units and a value of over US $103 billions. China continues to dominate, followed by the US and Japan.

Saziye Dickson, senior market research consultant, Worldwide Market Intelligence, BSRIA, says: “Considering the maturity, the US air conditioning market has experienced good growth. Focus is on upgrading of air conditioning units with intelligent solutions such as Wi-Fi.”

The Asia Pacific region continues to account for the largest share with 56% of global value. China, Japan and South Korea remain the market leaders on the VRF market due to the earlier adoption of the systems. As the Chinese government is increasing its targets against air pollution, building owners have started to pay attention to indoor air quality. This has triggered Chinese air conditioning manufacturers to deploy more resources on R&D in order to offer greener solutions making it a key selling point for end users.

In South Korea, the MOTIE (Ministry of Trade, Industry & Energy) raised the standard of rating significantly to increase the distinction of air conditioners’ energy consumption efficiency grade and promoted development of power saving technology (applied on 1st October 2018). As a result, most of the products in the market that used to be the highest grade for energy consumption efficiency fell to the fourth grade.

Europe is relatively small as a sales region, accounting for 7% by volume and almost 12% by value globally. Healthy growth in 2018 has been boosted by the hot summer, a positive economy and construction activities. In the southern parts of Russia, sales of air conditioners continue to record a 15% to 20% increase year on year. A cooler summer and currency fluctuation were the main reasons behind the decline of sales in Turkey.

The fluctuation in oil prices in the Middle East had an impact on construction and the air conditioning industry. The AC market in Iran remains affected by the lack of energy subsidies and higher import duties. Egypt on the other hand, has been identified as a leader in the air conditioning market.

Further afield, India was one of the first countries in the world to launch a national cooling action plan (India Cooling Action Plan) in September 2018. Sales in the African counties are affected by the trade regimes and high import duties.

In terms of air conditioning technology itself, BSRIA’s other recent report on the controls sector highlighted the growing importance of IP connectivity. This applies increasingly to building services products, including chillers. It is likely that this trend will continue as data gathering and energy monitoring become more important with the significant drivers to building energy efficiency.




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