May 22, 2024

Air Conditioning Systems Market is Estimated to Witness High Growth Owing to Technological Advancements in Smart AC and IoT Integration

 Air conditioning systems reduce the temperature and humidity of indoor air to provide thermal comfort. They help maintain an ideal indoor environment for residential as well as commercial spaces. Rising disposable incomes and rapid urbanization are fueling the demand for air conditioning systems across the globe. Advancements in technologies such as connectivity, smart controls and IoT integration are further propelling the growth of the air conditioning systems market.

The Global Air Conditioning Systems Market is estimated to be valued at US$ 339.25 Bn in 2024 and is expected to exhibit a CAGR of 7.4% over the forecast period 2024 to 2030.

Key Takeaways
Key players operating in the Air Conditioning Systems Market Size  include Jazz Pharmaceuticals, Inc. (Ireland), Daikin Industries Ltd. (Japan), Mitsubishi Electric Corporation (Japan), LG Electronics (South Korea), Panasonic Corporation (Japan) and others.

The development of smart and connected air conditioning systems with IoT integration is opening new growth opportunities in the market. Manufacturers are focusing on developing Wi-Fi enabled smart ACs with remote monitoring and controlling capabilities. Furthermore, growing construction industry and increasing commercial construction activities across developing nations are fueling the demand for variable refrigerant flow (VRF) and chilled water air conditioning systems. Technological advancements such as development of eco-friendly refrigerants with zero ozone depletion potential (ODP) and low global warming potential (GWP) are further driving the growth of the air conditioning systems market.

Market drivers
Rapid urbanization and growing construction industry: Rising urbanization accompanied by increasing construction activities for commercial and residential buildings is the major growth driver for air conditioning systems market. Construction of green buildings and smart homes/offices further propels the demand.
Increasing disposable incomes: Rising disposable incomes especially in developing economies are enabling higher spending on consumer appliances and durables including air conditioners. Growing middle class population is increasing the purchasing power of consumers thereby augmenting the sales of air conditioning systems.
Hot weather conditions: Surging global temperatures owing to climate change is increasing the cooling needs worldwide. This rising cooling demand acts as a key growth propeller for air conditioning systems market.

Current Challenges in Air Conditioning Systems Market
The rising demand for energy-efficient cooling systems is creating short-term supply issues for certain components globally. Additionally, raw material prices and transportation costs have increased significantly due to ongoing global supply chain disruptions. Many manufacturers are still facing obstacles linked to labor shortages. The shift toward eco-friendly refrigerants is posing technology upgrades that require time and investment to implement.

SWOT Analysis
Strength: Air conditioners help improve overall comfort levels and productivity. Growing construction activities worldwide is raising demand.
Weakness: Initial installation costs tend to be high. Suboptimal insulation in many buildings leads to inefficient energy usage.
Opportunity: Rapid urbanization in developing nations is a major driver. Rising living standards are propelling residential usage. Increasing focus on smart and connected features presents new avenues.
Threats: Stringent energy efficiency standards necessitate ongoing research and development expenses. Rising environmental consciousness is accelerating the adoption of greener alternatives.

Geographically, the North American and Asia Pacific markets currently hold the major shares of the global air conditioning systems industry in terms of value. This is due to the large population bases and rising disposable incomes leading to greater affordability of air conditioners in countries such as the U.S., China, and India.

The Asia Pacific region is projected to witness the fastest growth during the forecast period owing to robust economic development and improvements in standards of living. Government initiatives and growing participation of regional manufacturers are enhancing the regions attractiveness. China, in particular, represents the largest manufacturing hub as well as consumer market for air conditioning systems worldwide.

Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it