Global Air Condition (AC) Market Growth, Share, Size, Trends and Forecast (2025 - 2031)

• In December 2023: Daikin introduced its new line of inverter air conditioners, offering improved energy efficiency and enhanced comfort features for residential and commercial applications.

• In September 2022: LG Electronics introduced its new line of DualCool air conditioners, offering both heating and cooling capabilities for year-round comfort.

The global air conditioner (AC) market is witnessing steady growth, driven by rising urbanization, increasing disposable incomes, and climate change concerns. By type, split air conditioners dominate the market due to their energy efficiency and affordability for residential and small commercial applications. Rooftop air conditioners are preferred in large commercial spaces, while indoor packaged air conditioners cater to institutional and industrial needs. The "others" category includes portable and window ACs, which continue to hold a niche market share, particularly in cost-sensitive regions. The demand for energy-efficient and inverter-based ACs is also gaining traction due to stringent environmental regulations.

In terms of duct type, the market is broadly categorized into ducted and ductless systems. Ductless air conditioners (such as split ACs) dominate in residential and small commercial applications due to their ease of installation and energy savings. In contrast, ducted systems (such as central and rooftop ACs) are preferred in large-scale commercial and industrial applications, where centralized cooling is essential. The growing emphasis on smart ACs and IoT-enabled climate control solutions is further shaping consumer preferences across both duct types.

The market's application segments include commercial, residential, institutional, industrial, and other categories. The residential segment remains the largest, fueled by rising global temperatures and increasing demand for home cooling solutions. The commercial sector, including offices, retail spaces, and hospitality, is also witnessing substantial growth due to expanding infrastructure development. The industrial and institutional segments—covering factories, hospitals, and educational facilities—are gaining momentum with a growing focus on air quality and temperature control. Emerging markets in Asia-Pacific and the Middle East are experiencing the highest growth rates, driven by rapid urban expansion and government initiatives promoting energy-efficient cooling solutions.

Global Air Condition (AC) Segment Analysis

In this report, the Global Air Condition (AC) Market has been segmented by Type, Duct Type, Application and Geography.

Global Air Condition (AC) Market, Segmentation by Type

The Global Air Condition (AC) Market has been segmented by Type into Split air conditioner, Rooftop air conditioner, Indoor packaged air conditioner and Other air conditioners.

Split air conditioners are widely used due to their efficiency and flexibility. These systems consist of two main components: an indoor unit that cools the air inside and an outdoor unit that expels heat. This configuration allows for quiet operation and effective cooling in individual rooms or zones, making them ideal for residential and small commercial spaces where precise temperature control is required. The ability to install multiple indoor units connected to a single outdoor unit further enhances their appeal for various applications.

Rooftop air conditioners are typically used in commercial and industrial settings. These systems are designed to handle larger cooling loads and are installed on rooftops to save indoor space. Their robust design allows them to efficiently cool large areas such as office buildings, shopping malls, and manufacturing facilities. Rooftop units are favored for their centralized cooling capabilities and their ability to manage significant airflow and temperature control demands.

Indoor packaged air conditioner combine all essential components into a single unit installed indoors. This design is advantageous for buildings with limited external access or where space constraints prevent the installation of separate outdoor units. Indoor packaged systems are commonly used in small commercial applications or as supplementary cooling in residential settings. They offer simplicity in installation and maintenance, as well as ease of access for service.

Other air conditioning systems encompass a variety of specialized solutions tailored to unique requirements or environments. This category includes systems such as portable air conditioners, which offer mobility and temporary cooling solutions, and ductless mini-split systems, which provide targeted cooling without the need for extensive ductwork. The diversity within this segment highlights the market's adaptability to various cooling needs, from residential applications to specialized industrial cooling requirements.

Global Air Condition (AC) Market, Segmentation by Duct Type

The Global Air Condition (AC) Market has been segmented by Duct Type into Ductless and Ducted.

Ductless air conditioners, often referred to as split or mini-split systems, are designed without the need for ductwork. These systems consist of an indoor unit and an outdoor unit connected by refrigerant lines. The indoor unit is mounted on a wall or ceiling and directly cools the room, while the outdoor unit handles heat expulsion. Ductless systems are highly valued for their flexibility and ease of installation, making them ideal for residential spaces, small commercial settings, and retrofit projects where installing ducts would be impractical or disruptive. They provide the advantage of precise temperature control for individual rooms or zones, enhancing energy efficiency and user comfort.

Ducted air conditioners, on the other hand, utilize a network of ducts to distribute cooled air throughout a building. These systems, commonly known as central air conditioners, are suitable for larger spaces or buildings requiring uniform cooling. Ducted systems include central air handling units that are usually installed in a concealed location, such as a basement or attic, and use ducts to deliver air to various rooms or zones. This type of system is favored for its ability to maintain consistent temperatures across multiple areas and for its capacity to integrate with existing heating systems. The primary advantage of ducted systems is their capability to provide comprehensive cooling coverage while maintaining a clean and unobtrusive installation.

Global Air Condition (AC) Market, Segmentation by Application

The Global Air Condition (AC) Market has been segmented by Application into Commercial, Residential, Institutional, Industrial and Other.

Commercial air conditioning systems are designed to meet the cooling needs of business and retail environments. These systems are employed in office buildings, shopping malls, hotels, and restaurants, where maintaining a comfortable climate is essential for both employees and customers. Commercial AC systems often need to manage larger spaces and higher cooling loads compared to residential systems, and they may include advanced features such as zoning, energy management, and integration with building management systems.

Residential air conditioning systems cater to individual homes and apartments, providing comfort and climate control for everyday living. Residential systems are designed to handle the specific cooling requirements of various home sizes and layouts. These systems typically emphasize energy efficiency, ease of installation, and quiet operation. The residential segment includes various types such as split systems, window units, and portable air conditioners, each suited to different needs and preferences.

Institutional air conditioning systems are used in public and educational buildings such as schools, hospitals, and government offices. These systems must address unique requirements related to high occupancy, sensitive equipment, and specialized environmental conditions. For instance, in hospitals, precise temperature and humidity control are critical for patient comfort and the preservation of medical supplies. Institutional systems are often designed for durability, reliability, and ease of maintenance.

Industrial air conditioning systems are engineered for large-scale facilities such as factories, warehouses, and manufacturing plants. These systems must handle significant heat loads generated by equipment and processes, requiring robust design and high cooling capacity. Industrial air conditioners often include features tailored to harsh environments and high operational demands, such as enhanced filtration, robust construction, and high-efficiency performance.

Global Air Condition (AC) Market, Segmentation by Geography

In this report, the Global Air Condition (AC) Market has been segmented by Geography into five regions; North America, Europe, Asia Pacific, Middle East and Africa and Latin America.

Global Air Condition (AC) Market Share (%), by Geographical Region, 2024

Europe also represents a mature and growing market for air conditioning. The demand in this region is influenced by stringent environmental regulations, which encourage the adoption of energy-efficient and low-emission systems. Countries like Germany, France, and the United Kingdom are leading the market, driven by increased focus on green building standards and advancements in AC technology. The European market is characterized by a strong emphasis on integrating AC systems with renewable energy sources and smart home solutions.

Asia-Pacific is the fastest-growing region in the global AC market, fueled by rapid urbanization, economic development, and rising temperatures. Countries such as China, India, Japan, and South Korea are experiencing substantial growth due to expanding middle-class populations, increased construction activities, and rising standards of living. The demand for air conditioning in this region is driven by both residential and commercial sectors, with a growing trend towards adopting energy-efficient and advanced cooling technologies.

Latin America shows a growing demand for air conditioning, driven by increasing temperatures and improving living standards. Brazil and Mexico are the major markets in this region, with rising residential and commercial construction contributing to the growth. However, the market is also influenced by economic fluctuations and varying levels of infrastructure development across different countries.

This report provides an in depth analysis of various factors that impact the dynamics of Global Air Condition (AC) Market. These factors include; Market Drivers, Restraints and Opportunities Analysis.

Drivers, Restraints and Opportunity Analysis

Drivers :

• Climate Change
• Rising Temperatures

• Urbanization - Urbanization is a global phenomenon reshaping societies and economies worldwide. It refers to the increasing population concentration in urban areas, driven by factors such as rural-to-urban migration, natural population growth, and economic opportunities concentrated in cities. This trend has profound implications across various sectors, including infrastructure, housing, transportation, and utilities like air conditioning.

  One of the primary impacts of urbanization on the demand for air conditioning is the concentration of population and economic activities in urban centers. As cities expand, they face higher population densities and more extensive built environments, leading to increased heat absorption and urban heat island effects. These factors contribute to elevated temperatures within cities, necessitating greater reliance on cooling technologies to maintain comfortable indoor environments in homes, offices, and public spaces.

  Moreover, urbanization drives demand for air conditioning through rising living standards and consumer expectations for comfort. As urban populations grow wealthier, there is a greater propensity to invest in residential and commercial air conditioning systems that offer enhanced convenience, energy efficiency, and climate control capabilities. This trend is particularly pronounced in regions experiencing rapid urbanization in Asia-Pacific, Latin America, and parts of Africa, where urban populations are expanding significantly.

  Urbanization also influences the types of air conditioning systems adopted. In densely populated urban areas, where space is limited and noise considerations are critical, ductless mini-split systems and compact rooftop units are favored for their flexibility and minimal footprint. Conversely, in larger commercial and institutional buildings characteristic of urban landscapes, centralized ducted systems are often preferred for their ability to efficiently cool expansive spaces and integrate with building management systems.

  From an environmental perspective, urbanization poses challenges related to energy consumption and greenhouse gas emissions associated with air conditioning. As cities grow, so does the demand for electricity to power cooling systems, contributing to peak demand pressures and potentially exacerbating energy infrastructure strain. Mitigating these impacts requires advancements in energy-efficient cooling technologies, adoption of renewable energy sources, and smart urban planning strategies that prioritize sustainable building practices and urban heat management.

Restraints :

• High Installation Costs
• Maintenance Requirements

• Energy Consumption - Energy consumption is a critical factor influencing the global air conditioning (AC) market, with significant implications for both operational costs and environmental sustainability. Air conditioning systems are known for their substantial energy use, especially during peak cooling periods, which can lead to increased electricity demand and strain on energy infrastructure.

  As air conditioning becomes more prevalent in residential, commercial, and industrial settings, the energy consumption associated with these systems continues to rise. This trend is driven by the increasing adoption of air conditioning units in new and existing buildings, along with the growing demand for cooling in regions experiencing rapid urbanization and rising temperatures. High energy consumption not only impacts utility bills but also contributes to higher greenhouse gas emissions, particularly in regions where electricity generation relies on fossil fuels.

  To address the challenges associated with energy consumption, the AC market is witnessing a shift towards more energy-efficient technologies. Innovations such as inverter-driven compressors, which adjust the compressor speed to match cooling needs, help reduce energy consumption compared to traditional on-off systems. Additionally, advancements in smart thermostats and building management systems enable better control and optimization of cooling processes, further enhancing energy efficiency.

  The development and adoption of eco-friendly refrigerants also play a role in reducing energy consumption and minimizing environmental impact. Modern refrigerants with lower global warming potential (GWP) contribute to more sustainable cooling solutions by reducing the overall carbon footprint of air conditioning systems.

Opportunities :

• Emerging Markets Growth
• Smart AC Systems

• Energy-efficient Technologies - Energy-efficient technologies are transforming the air conditioning (AC) market by addressing the growing concerns of energy consumption and environmental impact. These advancements focus on reducing the amount of energy required to cool spaces while enhancing performance and comfort.

  One of the most significant developments in energy-efficient AC technology is the use of inverter-driven compressors. Unlike traditional on-off compressors, which operate at full capacity or shut off completely, inverter-driven compressors adjust their speed based on the cooling demand. This modulation reduces energy consumption by maintaining a consistent temperature and avoiding the energy-intensive process of starting and stopping the compressor. Inverter technology enhances overall system efficiency and reduces operational costs.

  Variable refrigerant flow (VRF) systems represent another advancement in energy efficiency. VRF systems use a single outdoor unit connected to multiple indoor units, allowing for precise control of individual zones or rooms. By adjusting the refrigerant flow based on the specific cooling needs of each area, VRF systems optimize energy use and improve comfort. These systems are especially suitable for large buildings or commercial spaces with varying cooling demands.

  Smart thermostats and building management systems (BMS) play a crucial role in optimizing energy efficiency. Smart thermostats use advanced algorithms and sensors to learn user preferences and adjust cooling schedules accordingly. They can be controlled remotely via mobile apps, enabling users to fine-tune settings and reduce energy use when spaces are unoccupied. BMS integrates various HVAC components, including air conditioning systems, to manage energy consumption across a building. By coordinating heating, cooling, and ventilation, BMS ensures that energy is used efficiently and effectively.

Key players in Global Air Condition (AC) Market include :

• Carrier Corporation
• Daikin Industries Ltd
• Samsung Ac
• Johnson Controls
• Lennox
• Panasonic Corporation

In this report, the profile of each market player provides following information:

• Company Overview and Product Portfolio
• Key Developments
• Financial Overview
• Strategies
• Company SWOT Analysis