NORTH AMERICA AIR CONDITIONING SYSTEMS MARKET ANALYSIS

The North america air conditioning systems market was valued at US$ 33,211.3 Mn in 2022 and is forecast to reach a value of US$ 46,028.1 Mn by 2030 at a CAGR of 4.16 % between 2023 and 2030.  Air conditioning is the process of removing heat and moisture from the interior, in order to improve the comfort of occupants. Air conditioning can be used in both commercial and domestic environments. Furthermore, air conditioning is also used in cooling and dehumidifying electronic devices such as computer servers, power amplifiers, and other delicate products. Inverter-based and solar-based air conditioning systems are expected to witness significant growth in the near future due to its energy-efficient features, which helps meet stringent energy regulations.

North America Air Conditioning System Market: Regional Insights

The regional market North America air conditioner is expected to be driven on the account of different end use applications from different sectors and diverse weather circumstances. Demand for air conditioners in North America is estimated at the rate of CAGR of over 4.16% from 2023 to 2030. Traditional air conditioning systems that consume significant energy are expected to be replaced by products that consume less energy.

Figure 1: North America Air Conditioning System Market Share (%), in terms of Value, By Region, 2022

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North America Air Conditioning Systems Market - Impact of Coronavirus (Covid-19) Pandemic

Due to Covid-19 pandemic, many industries witnessed significant shift in their business. There has been a decline in the demand for air conditioning system due to spread of coronavirus disease, as export of air conditioning components remain suspended all operations. Most of the private companies have announced work from home till the situation gets under control. Due to in-home isolation worldwide, there is less demand for air conditioning systems in the offices. For instance, in May 2020, Facebook, Twitter, and Shopify Inc. have decided to make partial or full work from home to minimize the spread of COVID-19 across the globe. Thus, in turn, decreases the demand for air conditioning systems market.

North America Air Conditioning Systems Market Drivers:

1. Increasing demand for energy-efficient products to drive growth of the North America air conditioning systems market during the forecast period

A vast pool of consumers across North America is replacing its existing air conditioning systems with models that consume less energy and help in reducing the electricity bill. This is typically due to the availability of energy-efficient options in the market. Furthermore, central air conditioning products are expected to face stringent regulatory norms in the U.S., with ‘Energy Star’ being mandatory. Since consumers are increasingly becoming more aware of energy conservation, the demand for energy-efficient air conditioning systems is increasing. For instance, the home air conditioning system in the U.S. accounts for more than 8% of the total electricity produced there. Thus, these factors are expected to drive growth in the North America air conditioning systems market during the forecast period.

2. High growth of construction industry to propel the North America air conditioning systemsmarket growth over the forecast period

The building and construction industry in North America has witnessed significant growth in the recent past. This is owing to the rising demand for new households. As a matter of fact, North America has recovered after the economic slowdown in 2008 and 2009. Rise in building permits for construction of offices, malls, and industrial facilities are boosting the demand for air conditioning systems. Moreover, according to Coherent Market Insights analysis, commercials buildings are expected to grow at rate of 8% during the forecast period. Hence, these factors are expected to drive the growth of the market in the near future.

North America Air Conditioning Systems Market Opportunities:

Rising demand for replacement in the region can present lucrative growth opportunities

Energy consumption and rising environmental issues are the factors creating the need for replacing the conventional air conditioners in the North American region. The strict government regulations towards greener products will create an opportunity for the manufacturers of air conditioning systems to replace the existing models that use toxic refrigerants such as HCFC-22 and HFC. The newly developed energy-efficient models consume less energy and help consumers to reduce their electricity bills. The models that have ‘Energy Star’ accreditation will consume half of the energy as compared to the conventional models.

Availability of advanced features can provide major business opportunities

Many manufacturers are providing novel features such as a ubiquitous sensor network for smart cooling humidity control using auto humid control. These features help to provide customized temperature and humidity, balancing the surrounding nature. Market players can capitalize on these opportunities by providing novel products and gain a competitive edge in the market.

North America Air Conditioning System Market Trends:

Procurement of raw materials

There are several raw materials required in the manufacturing of air conditioning systems, such as steel, plastic, copper, and aluminum. The increasing price of raw materials may result in profit reduction for the manufacturers. These raw materials are used in the manufacturing of several components such as compressors, evaporators, fan coils, and condensers. The demand for energy-efficient and technologically advanced products has led to the customized demand for raw materials that play a vital role in the value chain of air conditioning systems. Growing demand in the air conditioning systems market is attracting manufacturers towards the raw material and component suppliers in the market.

Marketing and distribution

The finished goods move to the distributors and wholesalers in the supply chain, and these distributors engage in several promotional campaigns and advertisements in order to promote the product by raising awareness among the consumers. Marketing and sales promotions are an important component of the marketing mix to achieve desired sales. Distributors manage the inventory as per the demand, and they also recommend products to consumers. Celebrity endorsements will be an added advantage for the sale of air conditioners, and also add value to the entire chain.

North America Air Conditioning Systems Market - Impact of Coronavirus (Covid-19) Pandemic

Due to Covid-19 pandemic, many industries witnessed significant shift in their business. In recent months, many government bodies across world are introducing guidelines about the proper use of air conditioning systems and ventilation in order to contain the spread of COVID-19 in residential and commercial spaces. Manufacturers of air conditioning systems are also focusing on introducing new campaigns in order to contain spread of coronavirus pandemic. Thus, in turn, it will provide lucrative growth opportunities for North America Conditioning System market in the future.

North America Air Conditioning System Market Restraints:

Decrease in profit margins to hamper the North America air conditioning systems market growth over the forecast period

Domestically available products are facing severe competition from Made-in-China product. These Chinese manufacturers such as Gree, Midea, and Haier are offering air conditioners at competitive prices, which is hindering revenue generation of domestic players. As a result, profit margins are crunched and investment in research and other activities will be significantly affected. Hence, these factors are expected to restrain growth of the North America air conditioning systems market during the forecast period.

Rising energy consumption and effect of environment to hinder the North America air conditioning systems market growth over the forecast period

Energy consumption has been the major concern for air conditioners and is slowing down the growth of the air conditioning systems market in North America. The commercial, residential, and industrial sector consumes about one trillion kilowatt-hours of electricity annually. Most of the air conditioners worldwide use HCFC-22 and HFC as a refrigerant, which are prime contributors to ozone depletion. These are major restraining factors associated with air conditioning systems. Therefore, these factors are expected to hinder the market growth in the near future.           

Figure 2: North America Air Conditioning System Market Share (%), in terms of Value, By Segment, 2022

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North America Air Conditioning System Market Segmentation:

North America Air Conditioning Market is segmented by Product type and by end user by Product type (Portables, Windows, Splits, Single packaged, Chillers, Airside). By end use:( Residential, Commercial, Tourism and Hotel Industry, Tents: New End Use Segment, Industrial).

North America Air Conditioning System Market: Key Developments

1. Key companies in the market are involved in product launches, in order gain a competitive edge in the market. For instance, in February 2020, Panasonic launched a new range of connected air conditioners.
2. In September 2020, A new AC Plasma Culster Ion (PCI) technology to inactivate the coronavirus was developed by Sharp Corporation.

North America Air Conditioning System Market: Key Companies Insights

The North America Air Conditioning System Market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R&D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis.

Some of the key players in the North America Air Conditioning System are Daikin Industries Ltd., Carrier, Goodman, Lennox, Panasonic, Ingersoll Rand, LG Electronics, Samsung Electronics, Mitsubishi Corporation, and Hitachi Ltd.

*Definition: Air conditioning is the process of removing heat and moisture from the interior, in order to improve the comfort of occupants. Air conditioning can be used in both commercial and domestic environments. Furthermore, air conditioning is also used in cooling and dehumidifying electronic devices such as computer servers, power amplifiers, and other delicate products.