LATAM Heating, Ventilation and Cooling Market Overview
Heating, Ventilation and Cooling (HVAC) Market size was valued at $8.4 billion in 2021, and it is estimated to grow at a CAGR of 6.2% during 2022-2027. The growth is mainly attributed to the increasing adoption of split units owing to its easier installation, high energy efficiency, driving the LATAM Heating, Ventilation and Cooling Market. Release of greenhouse gases and increasing pollution due to the presence of oil and gas industries has led to the global warming potential which is set to create opportunities for the adoption of new refrigerants in the HVAC industry. The increasing demand in residential and commercial infrastructure have led to the rise in urbanization. This growing demand in the construction industry will drive the HVAC equipment market including heat Pumps, air conditioners, air handlers, cooling towers and dehumidifiers. The rising adoption of split units with humidity control solutions, especially ducted split air conditioners will drive the market growth. The continuous increase in the prices and availability of these raw materials and components such as cooling panels has been a major challenge for the growth of the HVAC equipment market.
LATAM Heating, Ventilation and Cooling Market Report Coverage
The report: “LATAM Heating, Ventilation and Cooling Market Forecast (2022-2027)”, by IndustryARC, covers an in-depth analysis of the following segments of the LATAM Heating, Ventilation and Cooling Market.
- Brazil dominated the LATAM Heating, Ventilation and Cooling Market in term of revenue in 2021.
- Integration of IoT technology has been pushing the HVAC industry with growing trend of smart homes in APAC and European regions.
- Increasing adoption of variable refrigerant technology HVAC systems in commercial sector provide opportunities for the global market.
- High initial investment and stiff competition are the major challenges that hamper the growth of the market.
LATAM Heating, Ventilation and Cooling Market, By Application, 2020
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LATAM Heating, Ventilation and Cooling Market Segment Analysis – By Cooling
Air Conditioners held the major market share of 66.9% in 2021 owing to high adoption of HVAC systems in residential sector. There is high adoption of split type HVAC systems as it involves in easier installation process compared to traditional systems. It is of more efficient and customizable as there are two components to a split system. It also offers less maintenance and value added services as the energy efficiency of HVAC split system is high compared to other types. This is poised to propel the market. Rising VRF adoption in the region is also propelled to drive the AC market growth.
LATAM Heating, Ventilation and Cooling Market Segment Analysis – By Application
Commercial sector is the fastest growing segment in LATAM Heating, Ventilation and Cooling Market and is estimated to grow at a CAGR of 7.2% during forecast period 2022-2027 despite unstable economic performance in the region. Increasing adoption of ventilation and air cooling systems in offices, retail shops, shopping malls, hotels and others is set to boost the demand of LATAM Heating, Ventilation and Cooling Market. With the increase in investments of IT sector, there is high adoption of HVAC systems in IT offices. Thus, the adoption of HVAC systems is anticipated to increase in commercial buildings, thereby driving the market during forecast period.
LATAM Heating, Ventilation and Cooling Market Segment Analysis – By Geography
Brazil dominated the LATAM Heating, Ventilation and Cooling Market in 2021 with a market share of 37.1%, followed closely by Mexico owing to implementation of new refrigerants in chillers and Air Conditioning units. The increasing demand in the residential and commercial infrastructure have led to the rise in urbanization. This growing demand in the construction industry will drive the HVAC equipment market. Increasing income level of customers, expansion and modernization of commercial and industrial facilities is resulting for the growth of HVAC systems in South America. The rising need for cooling equipment in commercial buildings is creating demand for the HVAC equipment
LATAM Heating, Ventilation and Cooling Market Drivers
Increasing demand for energy efficient solutions and smart homes
Adoption of energy efficient appliances has become a major trend. As HVAC systems consume less energy, the pressure on power plants is lessened, which, in turn, reduces the burning of fossil fuels. HVAC system has become a prime choice of equipment that could easily become the backbone for smart homes. This has increased the demand for HVAC systems in industries. Integration of intelligent HVAC system equipped with sensors allow users in controlling the temperature in every room of their house at any point of time. This is poised to drive the market. In Mexico for example, HVAC accounts for 44% of a commercial building’s energy consumption. Thus, with increasing focus on energy reduction, HVAC is one of the first focus areas thus driving market growth.
Kigali Amendment on HFCs
The Kigali deal on HFCs is in fact fiendishly complicated and has taken years to negotiate in various technical and political forums. The final agreement caps and reduces the use of HFCs in a gradual process beginning in 2019. More than 100 developing countries will start taking action from 2024, a date that has sparked concern from some groups that the changes will be implemented too slowly. Countries, including Mexico and Brazil, will start phasing out synthetic HFCs in 2019. The deal reflects countries’ differing levels of development. Because nearly all HFCs are made by a handful of giant western chemical companies and are used in air-conditioning units and cooling systems made and sold in rich countries, it was relatively easy for their governments to put pressure on a single global industry. Alternatives such as hydrocarbons, ammonia and CO2 are widely available, safe, approved and on the market. As we see phase out of HFC refrigerant, HVAC systems compatible with such refrigerants will also see a decline in demand and ultimately be phased out and give way for new equipment. But phasing out HFC systems will definitely impact the market negatively as hybrid refrigeration systems would require less resources comparatively. This will in turn impact the growth of HVAC sensors in these regions as well.
LATAM Heating, Ventilation and Cooling Market Challenges
Stiff Competition and High Cost of HVAC Systems
As there are huge number of players, there is stiff competition existing between the players. Due to intense competition, some HVAC companies offer them at low prices. Additionally high capital investment and lack of skilled labor which restricts the new players to enter into market. HVAC maintenance requires constant filter change, and regular check which involves huge cost. HVAC maintenance for instance costs $100-$150 as a one time fee excluding any repair or part issues. Therefore, the maintenance costs also become a major a major challenge for HVAC end users which hampers the growth of the market.
LATAM Heating, Ventilation and Cooling Industry Outlook
Product Launches, Acquisitions, and R&D activities are key strategies adopted by players in the LATAM Heating, Ventilation and Cooling Market. HVAC major 10 companies include
- Johnson Controls International plc
- United Technologies Corporation
- Ingersoll-Rand plc
- Daikin Industries Ltd
- Mitsubishi Electric Corporation
- Toshiba Carrier Corporation
- LG Electronics Inc
- Fujitsu Limited
- Gree Electric
- Midea Group
- In January, 2022 Walmart is set to deploy eco-friendly refrigerant in Mexico and Central America through Honeywell’s reduced global-warming potential refrigerant Solstice N40 (R-448A)
- In July 2020 Brazil Published New AC Energy Efficiency Label Regulation. This regulation has been designed to increase the stringency of labeling standards for AC equipment.