The global commercial air conditioning system (VRF) market is estimated to be valued at $34,619.0 million by 2027, surging from $15,859.8 million in 2019 at a noteworthy CAGR of 13.5%.
Impact Analysis of COVID-19 on the Commercial Air Conditioning System (VRF) Market
The global market for commercial air conditioning system (VRF) has had to experience sluggish growth amid the COVID-19 pandemic. The market experienced this slow growth owing to diminishing demand for the product during the pandemic due to disruption in the industrial supply chain. Furthermore, the implementation of complete lockdown to contain the spread of the virus disrupted the available manpower, thereby hampering the production volume.
Besides, the manufacturers, distributors, contractors, and/or service providers either refrained or were reluctant to enter commercial spaces and residential buildings for orders, installations, and/or services, which led to diminishing demand, which hampered the global demand for the VRF system.
The communal transmission of COVID-19 had a far-reaching impact on society, apart from the spreading of the viral infection. The direct impacts included shortages in supply in the production sector that resulted in salary cuts and loss of jobs. Shortages in raw materials are anticipated to affect the supply chain, eventually leading in increased price of finished products, thereby increasing financial burden on buyers.
The manufacturers are spreading awareness as well as advertising the benefits of the HVAC systems. The companies are installing pre-filters to filter contaminated air to contain the spread of the virus which in turn is expected to have a positive influence on the market growth.
Global Commercial Air Conditioning System (VRF) Market Analysis
The rising global population and increasing urbanization are expected to positively influence the construction industry which in turn is anticipated to beef up the demand for air conditioning systems. For instance, in the past 50 years, the urban population in the Middle East region has grown at a significant pace, steadily higher than in China and/or Africa. As a result, approximately 70% of the population lives in metropolitan areas across the region, bringing it to the level of Europe. The GCC (Gulf Cooperation Council) is one of the highly urbanized parts of the world with 85% of people living in cities in 2016 which is expected to increase to 90% by 2050.
The high capital investment and lack of resources in growing businesses may obstruct the growth of the market. Moreover, the complexities and higher cost of the VRF system were also cited as key issues that may create a negative impact on the market during the forecast period.
The air conditioning market is widely concentrated in countries such as Japan, the U.S., South Korea, Saudi Arabia, and China however, the sales of AC systems are rapidly increasing in emerging economies due to the increasing population density in cities such as Abu Dhabi and Mumbai, among others fueling the construction of high-end residential buildings. Besides, due to the increasing number of double-income households, the demand for luxury electronic appliances is steadily occupying space in modern buildings and homes. For instance, as of 2019, the AC ownership in countries like India, Brazil, Mexico, Indonesia, and Turkey is below 25%; however, ownership of AC systems is expected to increase in coming years. As per the study by IEA, 2/3 of households worldwide will have air conditioning systems by 2050 of which China, India, and Indonesia will collectively account for half of the total number, thereby providing growth opportunity for air conditioning systems in the emerging economies.
Global Commercial Air Conditioning System (VRF) Market, Segmentation
The global commercial air conditioning system (VRF) market is segmented based on type, component, application, and region.
The type segment is further classified into heat recovery systems and heat pump systems. Among these, the heat pump system sub-segment is anticipated to have the fastest growth and surpass $12,470.2 million by 2027, with an increase from $4,903.4 million in 2019.
The market growth can be attributed to increasing adoption of air conditioners in high-rise buildings, offices, clinics, and residential consumers. The heat pump system is easy to install and maintain as well as consumes less energy compared to heat recovery system owing to which this system has gained popularity among residential consumers, which is expected to fuel the demand for the heat pump market in the coming years.
The component segment is further divided into outdoor unit, indoor unit, and control system. The outdoor unit sub-segment is anticipated to have a dominating market share in the global market and register a revenue of $15,502.4 million during the analysis timeframe.
The outdoor unit is also called as the condensing unit can connect with the multiple indoor units. The market for the outdoor unit is driven by the growing demand in the retrofitting and replacement market, especially in the U.S., China, Japan, and South Korea. Besides, the VRF technology is energy-efficient compare to conventional HVAC systems owing to which the VRF system is gaining popularity in the emerging market. Additionally, growing investment in building commercial spaces on account of rising IT and service sectors which in turn is anticipated to fuel the demand for VRR system over the forecast period.
The application segment is further categorized into commercial, residential, and industrial. The residential application sub-segment is predicted to have rapid growth and generate a revenue of $8,809.7 million by 2027.
Increasing temperature due to human activities has fueled the adoption of luxury electronic products including the HVAC system in countries like India, UAE, South Africa, and Germany. Furthermore, the rising population along with the rapid urbanization has led to an increase in the construction of residential and high-rise buildings across the world. Moreover, increasing disposable on account of rising double-income households in countries like India and China has fueled spending on luxury electronics, leading to a surge in the demand for VRF systems among residential consumers.
The commercial air conditioning system (VRF) market for the North American region is projected to witness rapid growth. This market generated a revenue of $1,221.2 million in 2019 and is further projected to reach up to $3,531.1 million by 2027.
The demand for VRF systems is surging in the North American region specifically because of factors such as growing popularity, increasing penetration, and rising awareness related to the energy efficiency of the VRF system among consumers. Moreover, the increasing presence of leading manufacturers and service providers will be one of the key factors for the growth of the North American commercial air conditioning system (VRF) market in the near future. For instance, on 22 May 2019, Mitsubishi Electric-Ingersoll Rand joint venture introduced City Multi and Nv series air conditioners for the U.S market.
Connect with Expert Analyst to get more insights Avail Full Report -$2999 (Read-only)@ https://www.researchdive.com/connect-to-analyst/8366
Key Players in the Global Commercial Air Conditioning System (VRF) Market
Some of the leading market players are DAIKIN INDUSTRIES, Ltd., Midea Group, JOHNSON CONTROLS INTERNATIONAL PLC., LG Electronics, MITSUBISHI ELECTRIC CORPORATION, Panasonic Corporation, FUJITSU, TOSHIBA CORPORATION, Ingersoll Rand, and Carrier Global Corporation.
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.