Air Conditioners Market Size, Share, Forecast, & Trends by Type (Window ACs, Split ACs, VRF, Centralized/Ducted ACs, Portable ACs), Tonnage, Technology (Inverter & Non-Inverter), Rating, End User (Residential, Commercial, Industrial), and Geography - Global Forecasts to 2031

The Air Conditioners Market was valued at $164.8 billion in 2023. This market is expected to reach $256.2 billion by 2031 from an estimated $172.8 billion in 2024, at a CAGR of 5.8% during the forecast period from 2024 to 2031.

Air Conditioners Market Size & Forecast

Based on volume, the air conditioners market is projected to reach 992.1 million units by 2031, at a CAGR of 6.2% during the forecast period.

This market's growth is fueled by escalating global temperatures and humidity levels, increasing consumer preference for convenience and comfort, and a rising demand for energy-efficient air conditioners. Additionally, the growing adoption of air conditioners featuring inverter and air purification technologies, coupled with advancements in HVAC systems, is generating significant opportunities for market players.

Air Conditioners Market Growth Drivers

Rising Demand for Energy-efficient Air Conditioners

Air conditioners are highly energy-intensive, and high AC loads exacerbate power consumption, placing additional pressure on power generation and distribution infrastructure. Consequently, there is a growing demand for energy-efficient air conditioning systems.

To address this need, market players are partnering with public sector organizations to offer energy-efficient solutions. For example, in August 2022, Carrier Global Corporation (U.S.) teamed up with Gallipolis City School District (U.S.) to design and install a multi-building HVAC system aimed at improving indoor air quality (IAQ) and enhancing energy efficiency. By 2050, the average energy efficiency of air conditioners is projected to more than double. According to estimates from the European Union (EU) and Japan, global energy demand from air conditioners is anticipated to triple by 2050, necessitating new electricity capacity equivalent to the combined electricity capacity of the United States. The global stock of air conditioners in buildings is expected to rise to 5.13 billion by 2050, up from 1.6 billion in 2022, translating to the sale of 10 new AC units every second for the next 30 years. This increasing demand for energy-efficient air conditioners is driving the growth of the global air conditioning market, as it aims to reduce energy costs and alleviate the strain on energy infrastructure.

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Air Conditioners Market Growth Opportunity

Rising Adoption of Air Conditioners Equipped With Inverter and Air Purification Technologies

Inverter technology represents a recent advancement in air conditioning systems. This technology regulates the speed of the compressor motor through an inverter, enabling precise temperature control. The ability to adjust the compressor motor's speed allows the unit to maintain a consistent temperature without the need to frequently switch the motor on and off. As a result, inverter air conditioners are considerably more energy-efficient compared to non-inverter models. By operating the compressor at variable speeds rather than full capacity, inverter air conditioners significantly lower energy consumption and associated costs.

Moreover, increasing concerns about air quality and its serious health implications have prompted key market players to enhance their product offerings. For example, in September 2022, Shark (U.S.) introduced two new air-cleaning innovations that integrate heating and cooling functions, providing customers with both safety and comfort.

These air purifiers consistently provide clean air at the optimal temperature. Additionally, in March 2022, Voltas (India) introduced an air conditioner featuring HEPA Filter technology. This product offers a unique value proposition of 'Pure & Flexible Air Conditioning,' incorporating a HEPA Filter, a PM 1.0 Sensor, and an AQI Indicator to enhance indoor air quality. Consequently, the increasing adoption of air conditioners with inverter and air purification technologies is anticipated to generate significant growth opportunities for players in the air conditioners market.

Air Conditioners Market Growth Trend

Connected Air Conditioners

Connected air conditioners have emerged as a significant trend in the air conditioning market. These systems allow users to control the temperature remotely via a smartphone or tablet, thanks to their internet connectivity. They also feature automatic settings restoration after a restart, which saves time and effort while helping to prevent system malfunctions due to voltage fluctuations. Furthermore, smart air conditioners contribute to reduced energy costs by enabling precise temperature customization and automatically adjusting their output once the desired temperature is achieved.

Smart air conditioners also have a lower carbon footprint compared to conventional models, making them more environmentally friendly. Additionally, market players are concentrating on launching air conditioners with enhanced connectivity and features. For example, in March 2021, Johnson Controls-Hitachi Air Conditioning India Ltd. (India) unveiled its new-generation room air conditioners. The company introduced the airCloud Home app for its Wi-Fi-enabled ACs, which includes advanced features such as smart geo-fencing and voice command capabilities. As a result, the trend of connected air conditioners is gaining significant traction in the market.

Air Conditioners Market Analysis: Key Findings

The Split ACs Segment to Dominate the Air Conditioners Market in 2024

Based on type, the air conditioners market is segmented into window ACs, split ACs, VRF (Variable Refrigerant Flow) systems, centralized/ducted ACs, and portable ACs. In 2024, the split ACs segment is expected to account for the largest share of over 56.0% of this market. This segment's substantial market share can be attributed to the rising demand for energy-efficient and low-noise air conditioners. Additionally, the growing focus of key market players on delivering high-quality air conditioners and introducing innovative split AC models has further contributed to this market dominance. However, the centralized/ducted AC segment is expected to register the highest CAGR during the forecast period.

The Up to 2 Ton Segment to Dominate the Air Conditioners Market in 2024

Based on tonnage, the air conditioners market is segmented into up to 2 ton, 2 ton to 5 ton, 5 ton to 10 ton, and more than 10 ton. In 2024, up to 2 ton segment is expected to account for the largest share of over 67.0% of this market. The segment's major market share is driven by the growing demand for customizable air conditioners for small homes and office spaces and the increasing need for 2-ton air conditioners in emerging economies such as Japan, China, and India. However, the 2 ton to 5 segment is estimated to record the highest CAGR during the forecast period.

The Inverter ACs Segment to Dominate the Air Conditioners Market in 2024

Based on technology, the air conditioners market is segmented into inverter ACs and non-inverter ACs. In 2024, the inverter ACs segment is expected to account for the larger share of over 57.0% of this market. The segment’s substantial market share can be attributed to increasing awareness of energy-efficient air conditioners, the benefits of inverter technology, including cost-effectiveness, stable temperature control, durability, faster cooling, lower power consumption, and environmental friendliness, as well as rising temperature and humidity levels. Moreover, the inverter ACs segment is anticipated to record the highest CAGR during the forecast period.

The Residential End Users Segment to Dominate the Air Conditioners Market in 2024

Based on end user, the air conditioners market is segmented into residential end users, commercial end users, and industrial end users. In 2024, the residential end users segment is expected to account for the largest share of over 80.0% of this market. The segment’s large market share can be attributed to the growing acceptance of smart home technology, the increasing trend among developers to offer air-conditioned apartments, and the rising need to enhance indoor air quality. Moreover, the residential end users segment is estimated to register the highest CAGR during the forecast period.

Geographical Analysis

In 2024, Asia-Pacific is expected to account for the largest share of over 47.0% of the air conditioners market. APAC’s large market share is attributed to several factors: key players' increased focus on launching innovative air conditioning systems, a growing emphasis on energy-efficient cooling solutions, expanding construction and development activities, rising demand for air conditioning driven by climate change, availability of cost-effective financing options for purchasing air conditioners, increasing need for space cooling, and rising income levels in the region. Moreover, the Asia-Pacific region is poised to record the highest CAGR of 6.5% during the forecast period.

Air Conditioners Market: Key Companies

The report offers a competitive analysis based on an extensive assessment of the leading players’ product portfolios, geographic presence, and key growth strategies adopted in the last three to four years. Some of the key players operating in the air conditioners market are Daikin Industries, Ltd. (Japan), Mitsubishi Electric Corporation (Japan), Hitachi-Johnson Controls Air Conditioning (Japan), Carrier Global Corporation (U.S.), Whirlpool Corporation (U.S.), Haier Smart Home Co. Ltd. (China), LG Electronics (South Korea), Voltas Limited (India), Panasonic Corporation (Japan), Robert Bosch GmbH (Germany), Samsung Electronics Co., Ltd. (South Korea), Fujitsu Limited (Japan), Blue Star Ltd (India), Toshiba Corporation (Japan), Electrolux (Sweden), Gree Electric Appliances Inc. (China), Midea Group Co. Ltd (China), American Standard Companies Inc. (U.S.) and among others.

Air Conditioners Industry Overview: Latest Developments from Key Industry Players

• In April 2024, Mitsubishi Heavy Industries (Japan) Thermal Systems commenced mass production of its KXZ3 series of commercial multi-split air conditioners for global markets. The new series is scheduled to debut in the European market this summer, with subsequent launches planned for Australia, New Zealand, and Turkey.
• In March 2024, Blue Star Ltd (India) introduced a new comprehensive range of room air conditioners, featuring both a 'best-in-class affordable' range and a 'flagship premium' range. The company launched over 100 models, encompassing inverter, fixed-speed, and window ACs across various price points to address the needs of every consumer segment.
• In March 2023, LG Electronics, a leading consumer durable and air conditioner manufacturer in India, launched its new 2023 range of DUALCOOL Inverter air conditioners as part of its AI+, health, and hygiene portfolio. The latest range includes air conditioners equipped with features such as AI+, Plasmaster Ionizer++, hot and cold functionality, and LG ThinQ (Wi-Fi-enabled) technology, which allows for touch-free operation through voice commands.

Air Conditioners Market Research Summary

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