BSRIA Annual Air Conditioning Study shows uptake of connectivityMay 2019

Saziye Dickson Global Research Manager

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

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.

Regional Overview

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

Saziye Dickson, Senior Market Research Consultant, Worldwide Market Intelligence, BSRIA, said:

“Considering the maturity, the US air conditioning market has experienced good growth. Focus is on upgrading of AC units with intelligent solutions such as Wi-Fi. Some countries from Latin America, on the other hand, recorded decline in sales.

The Asia Pacific region continues to account for the largest share with 56 per cent 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 AC manufacturers to deploy more resources on R&D in order to offer greener solutions making it a key selling point for end users.

Global AC in 2018

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 first grade in energy consumption efficiency fell to the fourth grade.

Europe is relatively small as a sales region, accounting for seven per cent by volume and almost twelve per cent by value globally. The 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 fifteen to twenty per cent increase per annum. Cooler summer and currency fluctuation were the main reason behind the decline of sales in Turkey.

The fluctuation in oil prices in the Middle East had an impact on construction and the AC industry. The AC market in Iran remains affected by the lack of energy subsidies and higher import duties. 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. Nigeria and Egypt have been identified as market leaders in the AC market.”

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The article is based on the latest BSRIA’s World Air Conditioning Study, published in March 2019, covering 31 countries.

BSRIA's Worldwide Market Intelligence (WMI) division is a leading provider of authoritative market reports, in addition to bespoke studies and management consultancy. The wide range of off-the-shelf solutions includes: HVAC, energy services and smart homes, renewable technology, refrigeration, structured cabling, lighting, security, fire detection and building controls.

BSRIA WMI also offers highly valued market consultancy to the building and HVAC&R market stakeholders building on its comprehensive data base of information, its profound expertise of the market’s competitive environment, its technical knowledge and strong analytical power.

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