Global HVAC Equipment Growth Opportunities

Revenue Forecast

The revenue estimate for the base year 2023 is $229.85 billion, with a CAGR of 7.0% for the study period 2023-2029.

The Impact of the Top 3 Strategic Imperatives on the Global Heating Ventilation and Air Conditioning Equipment Industry

Innovative Business Models

Why:

• HVAC companies are integrating sustainability into their value propositions and corporate strategies, creating green brands that are environmentally conscious.
• Companies that intend to offer climate-friendly products need to revolutionize their business practices by making their sourcing, production, and trading sustainable.

Frost Perspective:

• The push for green transformation comes partly from consumers, who increasingly demand sustainable products, creating a new market requirement.
• By following this innovative model, companies can not only maximize sales revenues, but also be subject to greenwashing accusations if their practices are only sustainable enough to garner publicity.
• The propagation of this business paradigm is reducing scope 3 emissions by demanding a shift across the whole value chain.

Internal Challenges

Why:

• Circularity in the HVAC industry is challenging due to certain inefficiencies in the value chain. HVAC equipment manufacturers need to improve several areas, including product design, sourcing raw materials, manufacturing, and packaging.
• In most cases, the reclamation cost of legacy equipment or refrigerants is higher than that of new material or refrigerants, which hinders the growth of circularity.

Frost Perspective:

• Frost & Sullivan opines that circularity in the HVAC industry should start from the design phase to enable material reclamation and reduce waste.
• With regulations defining the use of refrigerants, it will benefit the manufacturer and customer if HVAC companies opt for the most climate-friendly refrigerant—one that is relevant in the upcoming revisions to the regulations, such as R454B and R452B.

Disruptive Technologies

Why:

• Industries and countries face 3 crucial challenges: waste management, greenhouse gas (GHG) emissions, and limited resources. Circularization can potentially address all these issues.
• However, circularity in almost every industry is limited, mainly due to the lack of technology, high cost, or low yield from existing technology. Therefore, disruptive and effective technologies are essential to high circularity and sustainable growth.

Frost Perspective:

• Solutions to decarbonize the HVAC system, such as digital twin or blockchain-based carbon tokens for reduced carbon emissions, are being developed.
• Frost & Sullivan believes such disruptive technologies will offer high growth potential for present and future applications with significant opportunities for HVAC industry growth and transformation toward a circular economy.

Scope of Analysis

• The analysis focuses on the revenue earned from the sale price of HVAC equipment at the manufacturer level. Revenue from the sale of HVAC controls, installation, and maintenance fees are excluded from the sales figures.

• Revenue is calculated from the region where the HVAC products are sold and is not based on the area where they are manufactured.

• The analysis does not account for the margins set by channel partners, such as retailers (including online), wholesalers, distributors, or value-added services such as consulting, design, installation, and maintenance.
• HVAC equipment type are segmented as:
  • Heating
  • Ventilation
  • Cooling
• The verticals or end users are segmented as:
  • Commercial
  • Industrial
  • Residential

Scope

• The HVAC equipment included in the analysis are (these are not segmented separately):
  • Unitary equipment (e.g., air handling units [AHU] or rooftop units)
  • Applied equipment (e.g., central AHUs)
  • Chiller equipment (e.g., air- or water-cooled systems, air conditioners [split, cassette, ducted])
  • Heat pumps (e.g., air-, water-, or ground-source)
  • Ductless systems and others*

Global HVAC Equipment Vertical Industry Segmentation

HVAC Equipment Industry

Commercial Segment

The commercial segment includes the following building types:

• Offices
• Retail stores
• Education
• Healthcare
• Hospitality
• Data centers
• Transportation
• Government buildings
• Public buildings, such as religious places, museums and galleries

Industrial Segment

The industrial segment includes the following building types:

• Warehouses
• Manufacturing plants (e.g., pharma, automotive)
• Factories
• Life sciences
• Power plants
• Laboratories

Residential Segment

The residential segment includes the following building types:

• Individual houses (single family)
• Condominium/Apartments
• Townhouses

Competitive Environment

Top 5 Competitors

North America

• 1. Daikin

• 2. Trane
• 3. JCI
• 4. Carrier
• 5. Samsung

Europe

• 1. Daikin
• 2. Midea Group
• 3. Carrier
• 4. JCI
• 5. Samsung

Asia-Pacific

• 1. Gree Electric Appliances
• 2. Midea Group
• 3. Daikin
• 4. Mitsubishi
• 5. Haier

Middle East & Africa

• 1. Midea Group
• 2. JCI
• 3. Carrier
• 4. Samsung
• 5. Daikin

Latin America

• 1. JCI
• 2. Samsung
• 3. Midea Group
• 4. Carrier
• 5. Daikin