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Growth in the Turkish Air Conditioning MarketNovember 2007

During the past five years, the Turkish economy has started to flourish, with fast, steady growth in the construction industry, particularly in tourism, offices, shopping centres and residential construction. Air conditioning is now seen as an essential commodity, and the growth has led to a decline in prices of air conditioning units. In 2006, the value of the Turkish market for packaged air conditioning was estimated at US$601.5 million, and this is set to increase further in 2007-2008, following steady growth since 2000.

Windows and Moveables
In Turkey, the market for windows remains relatively small, with the majority of sales designated for the replacement market. Since reaching its lowest point in 2005, in terms of sales, the market for through the wall units has been stagnant and is expected to remain flat in the future. Moveables have not gained vast popularity in Turkey, this is due to the low installation costs of single splits. It is estimated that the market for moveables will remain stagnant with sales of approximately 1,500 units.

Minisplits and VRF
Minisplits remain the major growth area in the packaged air conditioning market. In 2006, they enjoyed a volume increase of 30 per cent compared with 2005. Despite previous estimates, the growth of the single split market has not slowed down and continues to grow at a high rate.

Mutlisplits are not very popular in Turkey, as most purchasers prefer to have two single splits installed in a building in case one system breaks down, although a higher penetration of multisplits in new buildings is expected.

Recently the Turkish government introduced an anti-dumping import tax targeting the wall type splits imported from China. It is anticipated that this barrier will improve the position of local Turkish manufacturers.

The VRF market is growing at a rate of 20 per cent each year in volume terms. MHI and Daikin dominate the VRF market, however they are facing competition from General, Mitsubishi Electric, Toshiba and Sanyo.

Large Packaged and Close Control
Due to the rapid growth of the multisplits market, sales of US-style ducted and large industrial splits have suffered a decline. Rooftops are not very popular in Turkey, because of Turkish construction practices, which do not favour flat roofs. The market for close control products remains relatively small, however experts believe that the expected growth of the telecoms sector will have an impact on the demand for close control units. The market for indoor packaged units was valued at US$1.3 million in 2006, which mostly comprised units less than 50kW.

Medium capacity chillers dominate the Turkish chiller market. 101kW-350kW chillers amount to 31 per cent of the total volume. The increase in sales of these chillers was fuelled from the ever-growing construction industry, as they are generally installed in small-medium sized hotels, offices and other mid-sized commercial applications. Scroll chillers still hold a large percentage of the market and 70 per cent by value. Recently the chiller market has started to come under pressure from the VRF market especially in units less than 100kW.

Air Handling Units & Fan Coils
Both the air handling units market and fan coils market are set to enjoy an increase of at least 10-14 per cent in value terms over the next couple of years, due to buoyant construction in Turkey. The Turkish market for airside products has recently grown faster than the chiller market, and now has nearly the same market value. Experts believe that if Turkey aligns its regulations regarding ventilation with those of the EU, the air handling market will receive a major boost.

The fan coil market has continued to grow at a steady pace since the crisis of 2000. Moreover, three quarters of the locally sold fan coils are imported and the introduction of low cost products from China has decreased the price of fan coils. Aesthetics in the indoor environment is a major factor contributing to the growing popularity of the concealed type of fan coils.

Statistical data in this article is quoted from the Turkish Market for Air Conditioning study, published in September 2007. Modular reports are available for Chillers, Airside Products, Windows and Moveables, Minisplits and Large Packaged and Close Control. For more information please contact Jon Williams at WMI.