HVAC Market Overview
The global Heating, Ventilation, and Air Conditioning (HVAC) market is experiencing significant growth, driven by increasing urbanization, rising indoor air pollution levels, and growing consumer demand for convenience and comfort. The market is further supported by rapid technological advancements in HVAC systems, including smart IoT solutions and energy-efficient inverter technologies. The HVAC market is expected to reach USD 456.6 billion by 2032, growing at a CAGR of 7.8% during the forecast period from 2025 to 2032. Increasing government initiatives to improve air quality, coupled with the rapid expansion of the e-commerce sector, are expected to present substantial opportunities for market players.
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HVAC Market Growth Drivers
1. Consumers’ Growing Inclination Toward Convenience and Comfort
Consumers are increasingly seeking convenience and comfort in their living and working spaces. HVAC systems play a crucial role in creating a comfortable indoor environment. The integration of smart IoT technology in HVAC systems allows users to control temperature settings remotely through smartphones, offering improved energy efficiency and cost savings. Leading manufacturers are focusing on developing smart HVAC solutions that enhance user convenience. For instance, in April 2022, Mitsubishi Electric Corporation (Japan) introduced an airflow-control technology that optimizes temperature distribution to improve comfort.
2. Increasing Urbanization and Indoor Air Pollution Levels
Rapid urbanization has led to a rise in indoor air pollution levels, posing significant health risks. Urban areas are characterized by high levels of pollutants such as nitrogen oxide, particulate matter (PM2.5), and volatile organic compounds (VOCs), which infiltrate buildings through ventilation systems and cracks. As a result, there is a growing demand for HVAC systems equipped with air purification features. In November 2024, Qubo (U.S.) launched three new smart air purifiers with advanced HEPA H13 filters in India, addressing the increasing demand for cleaner indoor air. Similarly, in May 2021, Daikin Industries Ltd. (Japan) launched two new series of air purifiers for the Middle East and Africa to improve indoor air quality (IAQ) in residential and commercial spaces.
3. Rising Adoption of Air Conditioners with Inverter and Air Purification Technologies
Inverter technology allows air conditioners to adjust the compressor motor's speed according to the required temperature, ensuring greater energy efficiency and cost savings. Unlike traditional air conditioners that operate at full capacity, inverter-based ACs maintain a constant temperature without frequent switching on and off. Shark (U.S.) introduced air purifiers with integrated heating and cooling functions in September 2022, allowing for year-round comfort and clean air. The increasing adoption of inverter and air purification technologies is expected to create lucrative growth opportunities for the HVAC market.
HVAC Market Segmentation
1. By Offering:
The HVAC market is segmented into components and services. In 2025, the components segment is expected to account for over 84% of the market share due to the increasing adoption of ventilation systems, heating pumps, and airflow distribution solutions. Carrier Global Corporation (U.S.) partnered with Gallipolis City School District (U.S.) in August 2022 to install a multi-building HVAC solution, enhancing IAQ and energy efficiency. However, the services segment is projected to grow at the highest CAGR, driven by the rising demand for maintenance and repair services to improve operational efficiency and compliance with building regulations.
2. By System:
The market is divided into primary and secondary HVAC systems. In 2025, the secondary HVAC systems segment is expected to dominate with a market share exceeding 66%. The growing adoption of air handling units to filter dust, allergens, and pollutants from incoming air is driving this segment’s growth. Secondary HVAC systems also enhance ventilation effectiveness and reduce energy costs.
3. By Distribution Mode:
The market is segmented into centralized and de-centralized systems. The de-centralized systems segment is projected to hold over 72% of the market share in 2025. De-centralized systems are preferred in smaller areas due to their reliability and energy-saving potential. These systems allow localized heating, cooling, and ventilation, reducing overall energy consumption and improving maintenance efficiency.
4. By Type:
The market includes split systems, dual fuel heat pump systems, ductless mini-split systems, packaged systems, and other types. The split systems segment is expected to account for over 28% of the market share in 2025 due to their energy efficiency and independent temperature control for different rooms. In March 2022, Blue Star Ltd (India) launched a new range of affordable split ACs with improved energy efficiency and durability. Meanwhile, the ductless mini-split systems segment is expected to register the highest CAGR during the forecast period.
5. By Portability:
The market is segmented into standalone/portable and in-duct/fixed systems. The in-duct/fixed systems segment is expected to dominate with a market share of over 59% in 2025, driven by increasing investments in improving air quality in commercial spaces. However, the standalone/portable segment is expected to grow at the highest CAGR due to rising consumer demand for portable HVAC solutions in residential settings.
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6. By Sales Channel:
The market is segmented into online and offline channels. The offline segment is expected to hold over 73% of the market share in 2025, driven by consumer preference for in-store guidance and immediate product availability. However, the online segment is expected to grow at the highest CAGR due to the growing e-commerce sector and the convenience of comparing products and reading customer reviews online.
7. By Application:
The HVAC market includes cooling, heating, ventilation, filtering, humidification and dehumidification, and air purification. The cooling segment is expected to account for over 32% of the market share in 2025 due to the increasing adoption of centralized HVAC systems and government initiatives to improve indoor air quality.
8. By End User:
The market is segmented into residential, commercial, industrial, IT and telecommunication, data centers, and agriculture. The residential segment is expected to account for over 26% of the market share in 2025 due to rising disposable incomes and increased focus on indoor air quality. In March 2022, Voltas Limited (India) launched its PureAir Inverter AC with HEPA filters to cater to the residential segment. However, the commercial segment is expected to grow at the highest CAGR due to stringent building regulations and increasing public awareness about indoor air quality.
Geographical Analysis
In 2025, the Asia-Pacific region is expected to dominate the HVAC market, accounting for over 45% of the market share. The region’s growth is driven by rapid industrialization, increased infrastructure spending, and the presence of leading market players. In February 2022, Godrej Appliances (India) introduced a premium range of air conditioners with IoT controls and advanced air purification technologies. The rising standard of living and growing awareness about indoor air quality are also supporting market growth in the region.
North America and Europe are also key markets for HVAC systems. In North America, strategic partnerships between HVAC manufacturers and retailers are driving market growth. In March 2025, Walmart Inc. (U.S.) partnered with Bryant Heating & Cooling dealers (U.S.) to enhance customer access to HVAC solutions. In Europe, growing environmental regulations and energy efficiency standards are encouraging the adoption of advanced HVAC systems.
Key Players and Developments
The global HVAC market is highly competitive, with key players focusing on strategic partnerships, product launches, and technological innovations to strengthen their market position.
· Samsung Electronics Co., Ltd. (South Korea) announced a joint venture with Lennox International Inc. (U.S.) in May 2025 to expand ductless and VRF systems in the U.S. and Canada.
· In April 2025, Voltas Limited (India) launched six new IoT-enabled AC models at the ACREX India 2025 trade show.
· In February 2024, Armstrong Fluid Technology (Canada) partnered with Hydronic System Optimisation (Hysopt) NV (Belgium) for HVAC digital twin modeling to improve energy efficiency.
· In February 2022, Carrier China (China) introduced the new XCT8 VRF series to meet rising demand in light commercial HVAC.
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