Global trends in AC&R 2014

Global Trends in AC&R

January 2015

Anette Meyer

Holley

2 Excellence in Market Intelligence

US Market Drivers and Restraints

2

Restraints

• Difficult access to

credit and

increasing income

inequality hits heavy

commercial and

single family

residential markets;

• Falling energy

prices make energy

efficient ‘new’

solutions less

appealing;

• Government

Institutional

investments fall

Drivers

• Economy expected

to grow by at least

3%;

• GDP growth will

drive increase in

construction

output;

• Light commercial

and residential

multifamily driving

market;

• VRF, ventilation,

smart residential

controls ‘hot’

product categories.


Competitive Landscape Trends in the US

3

In a stagnant or barely growing ‘traditional’ AC market, VRF is the Hot

Topic for the industry

Asian OEMs

North American OEMs

Control Manufacturers

Component OEMs

Expanding

market;

Production in

NA to start

Increasing

competition

Business

opportunity

‘Traditional’

market at

risk

BEMS

BACS

integration

Loss of

market size

New market

opportunity?

Loss of

market size

Ventilation OEMs

(DOAS)

Power

Utilities

End Users

Installers and

Specifiers


Hitachi and JCI

4

January 2014: JCI purchases 60% of Hitachi AC Business

including the manufacturing facilities

Complete AC range

including ductless

JCI access to established and emerging

markets for ductless and VRF

In the US the

Hitachi product

will be able to

rely on York’s

extensive

dealership

network

5 Excellence in Market Intelligence 5

AC Trends


AC Global Trends

World Air Conditioning Market from 2012

to 2017 (F) in unit terms

Total Units in 2014: 128 million

World Air Conditioning Market from 2012

to 2017 (F) in value (US$ million)

Total Value in 2014: US$ 96 billion


Top 12 in 2014

Ranking Country Trend Market Value* Market growth**(%) Hot products

Germany

Italy

Saudi Arabia

Australia

Russia

India

S. Korea

Brazil

USA

Japan

China

12 + 7% 1,066 Ductless, VRF, AHUs

11 1,106 + 5% Ductless, VRF, Chillers

10 1,273 - 1% None

9 1,292 + 3%

Ductless, Ducted, VRF 1,316 + 10%

Portables

8

7 1,349 + 2% None

* In US$ million for 2014 * *CAGR from 2014 to 2017

6 2,199 + 14% Ductless, VRF, AHU

2,227 + 1% Ductless, VRF 5

2,883 + 17% Ductless, VRF, Chillers 4

10,959 0%

US Ducted, VRF, Chillers

3

13,677 + 8%

34,290 + 4% Ductless, VRF, Chillers

2

1

UK

None


AC Splits Asian style Style

World Market Asian style Splits from 2012 to

2017 in units (number of pieces)

Top 10 countries in the world market for

Asian style Splits in 2014 by units (number of

pieces)

388,000 units in

2014 (excl. VRF)

USA

24th in the

world


AC US Ducted Splits

World Market for US Ducted Splits from 2012

to 2017 in units (number of pieces)

Top 10 countries in the world market for US

Ducted Splits in 2014 in value %

The US Ducted Split is

almost exclusively a North

American residential market


AC Chiller Market

World Market for Chillers from 2012 to 2017 in

value (US$m)

Top 10 countries in the world market for

Chillers in 2014 by value (US$m)

About US$981

million in 2014

USA

2nd in

the world


US Market for AC

US Market for AC by type of equipment in Value (US$ million) 2014 estimate and

CAGR from 2012 to 2017


US Minisplit Market

• Strong market recovery;

• Growth differential with ducted splits falling below 10%

• Mini splits market becoming more mature with growth rates below 15%;

• Regional bias remains North and South East + West;

• Canada: ‘emerging’ market; Wolf still to receive grant to start manufacturing AC

units


AC growth rate in Latin America, 2013

13

Argentina

US$864.8m

Brazil

US$2,883.6m

Mexico

US$558.9m

CAGR 2012-2017

GDP growth 2014 & 2015


Brazil

World fastest growing markets, CAGR 2013-17

14

Warm spots >5-10% growth

Cold spots <0% growth

Hot spots >10% growth

Venezuela

Russia

Italy

Indonesia

Australia

Japan

Nigeria

India Colombia

Vietnam

UK

Egypt Taiwan

USA

South Africa

Turkey

China

Iran

UAE

Croatia

Saudi

Arabia


Quantitative

1. Demographics and value curve: criteria for specification

3 Brand and product perception

4.Comparison of products: VRF vs. alternatives

5. Market expectations for VRF

6. Pain point analysis: rating of shortcomings, challenges,

weaknesses

7. Needs and requirements for VRF sales

Qualitative

1. Why VRF? Advantages and disadvantages

2. VRF controls: Scalability, integration, advantages,

disadvantages and implications

3. VRF suppliers

4. Market trends

5. Decision making process in commercial AC with reference

to VRF in particular

Residential

1. Why VRF in residential applications? Advantages and

disadvantages

2. VRF suppliers

3 Market trends

4. Decision making process in residential AC with reference

to VRF in particular

Selected Case Studies

Market Potential for VRF in the USA: A VOC study

15

Total Sample: 133

Audiences:

system specifiers

Published: March

2015

On-line Focus Group for

residential AC only


Global Trends in Refrigerants - US

16

HCs HFOs NH3 CO2 Low GWP Blends HFC 404a HFC134a HFC R32 HFC 410a OTHERS HFC R22

New Report –

Jan 2015


The US refrigeration market

17

$29 billion world commercial refrigeration equipment industry

US to remain largest commercial market ($11billion)

Mature market – growth slowed in recession

China, India fastest growing commercial markets

Key restraints include:

•less energy-efficient commercial refrigeration equipment,

•the Montreal and Kyoto protocols,

•Slow roll out of CO2 vs.ammonia

Domestic refrigerators and

freezers segment estimated at

$ 5.3 billion

Industrial:

India now has more cold

storage capacity than the

USA: (IARW).

Total cold storage Capacity:

for India = 131 million m³

the US = 115 million m³

China =76 million m³ of space.


The US refrigeration market

18

• Refrigeration accounts for more than 45% of the total energy consumption for food sales buildings

and over 15% for food services buildings: source Electric Power Research Institute 2014

• Supermarkets represent the greatest market share and potential for energy savings, specifically

through the optimization of controls and improvements in display cases, walk-ins, and reach-ins,

which may either be stand-alone unitary systems

• BSRIA has been developing a Road Map for Domestic and Commercial Refrigeration for Maximum

Energy Saving over Time for the Saudi Government.

Charge optimisation

Defrost control (e.g. on demand)

Door open warnings

Dual-loop system

Efficient compressor technology

Evaporator and condenser optimisation

Fan-assisted condenser Internal ice makers

(removing)

Improved door gaskets

Improved insulation e.g. vacuum insulation panels

Inverter driven compressors

LED lighting

Liquid line solenoid

Magnetic refrigeration system

Phase change materials

Wide glide refrigerants

0.5

0.0 1.0 2.0 3.0 4.0 5.0 6.0Timescale to apply (years)

H

M


World refrigeration & World AC&R compressors

19

2013-14 –

World

refrigeration; 9

countries

2015-16 – World AC &

Ref compressors


Contact details

20

Global trends in AC&R 2014

Data & Analytics

market growth

ac chiller market world

market production

market intelligence

traditional ac market

value us

vrf usa

ac trends