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Review of the World Air Conditioning Market 2007June 2008

In 2007, the world market for air conditioning was valued at US$62 billion compared to US$55 billion in 2006. Asia Pacific is the largest market with total sales amounting to US$28 billion in 2007. The Chinese market alone was valued at US$12 billion in 2007. Sales of air conditioners in the Total Americas region were valued at US$15 billion, followed closely by Europe with US$13 billion market size in 2007. The Middle East, Africa and India market was valued at US$5 billion.

The global residential/light commercial market, which includes windows, portables and moveables, was valued at US$39 billion, representing approximately a 14% increase from the previous year. Minisplits continued to be the largest market segment in terms of value.

In our 2008 report, figures for VRF are presented separately due to the increasing importance of this product group: in 2007 the VRF segment was valued at US$5 billion. The total value of the chiller market (excluding air side products) was estimated at US$7 billion in 2007.

China has become the world largest market for air-conditioning. China and the US were almost equal in market value in 2007, but in 2008 the Chinese market is expected to grow further and widen the gap between the two countries.

A growing awareness of green technologies and energy efficiency will continue to have a significant impact on air-conditioning applications in saturated markets and will support a trend for more advanced products such as inverters, heat recovery and VRFs.

Growth prospects by region
In 2007, the most rapidly growing market (among countries researched in 2007/08) was Ukraine, as the market value increased by above 45 per cent compared with 2006; this was closely followed by Greece. The growth came from an unexpected surge in minisplit sales due to a long and hot summer in both countries.

Growth prospects by product
- VRF has continued to be the best performing segment, and is expected to grow by around 15% in value during 2006-2011. Minisplit units of over 5kW will also show strong growth of above ten per cent in value during the same period.
- Centrifugal chillers are expected to perform slightly better than other chiller types, reflecting the strong growth in large construction projects mostly in the Middle East, Brazil, Russia, China and India.
- Indoor packaged is the flattest market with an annual growth in value of below two per cent.

Window/through the wall units
Currently, in 25 out of the 46 observed countries, the market for window units continues to decrease. The US is still the largest world market for windows, but sales dropped in 2007 compared with the previous period.

India, the second largest market in the world, will continue its sustained slow growth mostly due to strong demand from customers with low disposable income. However, at the moment the Indian windows market is experiencing strong competition from minisplits.

In 2007, half of the world sales in the moveables market were made in Europe. A hot summer combined with lack of minisplits stock and in some countries, installers’ availability, prompted the market to double in volume compared with its performance in 2006. However, the market in France plummeted by 75% and the markets in Spain, UK and Germany also experienced a decline. This was partially caused by customers switching to permanent cooling solutions such as minisplits in anticipation of changes in global weather.

China continues to be the world leader in the minisplits market. The chart demonstrates the Chinese market for minisplits will grow by 11 million units by 2011. China is the biggest manufacturer in the world and also largest minisplit market. With 24 million unitssold in 2007, China accounted for nearly half of the world minisplit sales.

Unitary products
The US market for unitary products decreased by US$0.5 million in 2007 compared with 2006, producing an overall decline in the world market value for unitary products. The market for large ducted splits less than 17.58kW in the US fell approximately by 13 per cent, in 2007 due primarily to the ailing US housing market. Approximately 80 per cent of all ducted split systems are sold to the residential sector. Overall in the world, total sales of rooftops and indoor packaged remained flat compared with 2006.

China, the biggest world chiller market reached US$1.6 billion by value in 2007. Growing rapidly at 19% per year, the market value of the Middle East and Africa region is expected to equal that of the Total Americas region by 2010. India was ranked as the sixth largest market by value in 2007, but was the second most attractive market in terms of growth â€" by 2011, this market’s value is expected to increase by around US$360 million.

Reciprocating chillers continue to disappear from the majority of markets and are expected to remain a niche, mostly process cooling application.

Centrifugal chillers boomed in the fastest emerging world construction markets: Brazil, Russia, India, China and the Middle East, all of which have a strong potential for further growth.

Statistical data in this article is quoted from the World Market for Air Conditioning study,
published in April 2008.