HVAC Systems Industry Overview

The global HVAC (Heating, Ventilation, and Air Conditioning) systems market was valued at approximately USD 233.55 billion in 2023 and is expected to experience significant growth, with a projected compound annual growth rate (CAGR) of 7.4% from 2024 to 2030. This growth is largely driven by the increasing demand for cost-effective and energy-efficient heating and cooling solutions across the commercial and industrial sectors. A key factor contributing to this expansion is the rising demand for high Seasonal Coefficient of Performance (SCOP) heating equipment, which offers efficiency during both winter and summer, further boosting product demand.

The growth of the global population plays a significant role in the market’s trajectory. According to the United Nations, the global population is expected to reach 9.7 billion by 2050, which represents an increase of 2 billion people over the next three decades. This population growth is largely driven by improving living standards, longer lifespans, lower mortality rates, and ongoing advancements in medical technology. As a result, there is a heightened need for new housing projects to accommodate this population surge. This growing demand for housing and commercial infrastructure is expected to positively influence the HVAC systems market.

Urbanization trends are another crucial factor accelerating market growth. As cities rapidly expand, there is a greater demand for energy-efficient HVAC systems in residential and commercial buildings. The rising focus on energy efficiency has led to increased demand for heat pumps, particularly in the residential sector, where they are seen as a cost-effective and environmentally friendly option for heating and cooling. In response to these trends, governments around the world have introduced various initiatives, including tax rebates and incentives, to encourage the installation of energy-saving HVAC systems. For example, in the U.S., the federal government extended a 26% tax credit for residential ground-source heat pump installations until December 31, 2022, and lowered it to 22% for systems installed in 2023.

Additionally, governments are implementing stringent regulations aimed at promoting the production of energy-efficient HVAC systems and reducing environmental impact. These regulations often include energy efficiency standards and emissions reduction targets that HVAC manufacturers must meet. The introduction of new HVAC standards or the updating of existing regulations, such as in the U.S., are expected to further stimulate market growth. For instance, in January 2023, the U.S. introduced the SEER2 (Seasonal Energy Efficiency Ratio) standard, which sets higher energy efficiency requirements for heat pumps and air conditioners in different regions of the country. Specifically, the minimum SEER2 rating for systems in northern states was set to 14, while in southern states, the minimum was 15.

Furthermore, the U.S. Environmental Protection Agency (EPA) is expected to phase out the use of R-410 refrigerant in HVAC systems by 2024 and promote the adoption of a new class of refrigerants, known as A2L, by 2025. This shift is anticipated to drive the replacement of older HVAC systems and encourage upgrades to more efficient systems, further boosting the market for HVAC systems.

Gather more insights about the market drivers, restrains and growth of the HVAC Systems Market

Regional Insights:

Asia Pacific HVAC Systems Market

• The Asia Pacific region led the global HVAC systems market, accounting for 46.5% of the market share in 2023.
• The market growth is driven by factors such as improving economic conditions, rapid industrialization, and commercialization in the region.
• Asia Pacific benefits from the availability of skilled labor at a low cost, making it an attractive region for production and manufacturing.
• The shift in production bases to emerging economies, particularly India and China, is expected to positively influence the market's growth in the region.

Canada HVAC Systems Market

• The HVAC systems market in Canada is experiencing growth, largely driven by the expanding construction industry.
• The increase in demand for residential, commercial, and industrial spaces is propelling this growth.
• The Canadian government has committed to spending USD 22.1 billion on social infrastructure development and residential construction projects until 2027.
• Additionally, under the ‘Investing in Canada’ program, the government plans to invest USD 142.9 billion in infrastructure development over 12 years, supporting HVAC systems demand.

France HVAC Systems Market

• The HVAC market in France is projected to grow due to the country’s increasing focus on energy efficiency in building construction.
• The French government has implemented and continues to enforce regulations aimed at reducing energy consumption and promoting sustainable practices in buildings.
• The RT2012 (Réglementation Thermique 2012) regulation sets stringent energy performance standards for new buildings, driving demand for advanced HVAC systems that meet these high efficiency standards.

China HVAC Systems Market

• China's HVAC systems market is expected to see growth in the coming years, fueled by government incentives and subsidy programs.
• The Air Pollution Prevention and Control Action Plan offers financial subsidies, reducing the upfront costs for HVAC systems, such as air-source heat pumps, in regions like Shanxi, Shandong, Beijing, Hebei, and Tianjin.
• The National New-type Urbanization Plan (2014-2020) aims to manage urban growth and has led to increased construction activities, creating higher demand for HVAC system installations.
• Demographic factors like population growth and improving living standards from rapid urbanization are further driving the need for HVAC systems in China.

Brazil HVAC Systems Market

• Brazil’s HVAC systems market growth is supported by rising investments in the technology and IT sectors.
• Companies like John Deere and Boeing have recently invested in technology centers, further boosting demand for HVAC systems.
• As foreign direct investments (FDIs) and technological hubs increase, the demand for energy-efficient and modern HVAC systems is anticipated to grow.

Saudi Arabia HVAC Systems Market

• The HVAC market in Saudi Arabia is experiencing significant growth, driven by rapid urbanization, increased construction activities, and a growing focus on energy-efficient solutions.
• Due to extreme climatic conditions, there is a high demand for both heating and cooling systems in the region.
• The adoption of advanced HVAC technologies, such as variable refrigerant flow systems and energy-efficient air conditioning units, is rising.
• Government initiatives promoting sustainable building practices and stringent building codes are also contributing to the market’s expansion.
• The regional market is increasingly focusing on smart, connected HVAC systems to improve energy efficiency, in line with broader trends towards modern, sustainable buildings in the region.

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• The global heat pump market size was estimated at USD 88.7 billion in 2023 and is expected to grow at a compound annual growth rate (CAGR) of 9.4% from 2024 to 2030.
• The global air purifier market size was estimated at USD 15.94 billion in 2023 and is expected to grow at a CAGR of 7.1% from 2024 to 2030.

Key HVAC Systems Company Insights

To increase market penetration and cater to changing technological requirements from various end-uses, such as residential, commercial, and industrial, product manufacturers use a variety of strategies, such as joint ventures, mergers, acquisitions, new product launches, and geographical expansions. Manufacturers are undertaking strategic acquisitions to gain an edge in the industry and increase their geographic presence.

For instance, in May 2023, Carrier Corporation introduced i-Vu Pro v8.5 for upgrading controller firmware, improving serviceability for customers, and reducing downtime of connected HVAC equipment. The latest enhancements are expected to help customers with Internet of Things (IoT) connectivity, robust security, and leading serviceability features. Furthermore, in February 2022, Johnson Controls, Inc. launched commercial rooftop units (RTUs) with series, such as Johnson Controls, YORK, and TempMASTER. These products are certified by the DOE 2023 efficiency standards.

Key HVAC systems Companies:

The following are the leading companies in the HVAC systems market. These companies collectively hold the largest market share and dictate industry trends. Financials, strategy maps & products of these HVAC systems companies are analyzed to map the supply network.

• Carrier Corporation
• Daikin Industries, Ltd.
• Fujitsu
• Haier Group
• Havells India Ltd.
• Hitachi Ltd.
• Johnson Controls
• LG Electronics
• Lennox International Inc.
• Mitsubishi Electric Corporation
• Rheem Manufacturing Company
• SAMSUNG
• Trane

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