The air-conditioning market in India

Trends suggest there is immense potential here, thanks to currently low market penetration combined with high growth figures.
A recent study published by Frost and Sullivan gives an overview of the air-conditioner (AC) market in India.

Concerning the residential AC market, foreign manufacturers are establishing infrastructures in India in order to capture the growing consumer durable/white goods market, propelled by growth factors such as higher disposable incomes, the propensity of the young workforce to spend on electrical and electronic goods and an increasing base of middle-class households.
According to National Council of Applied Electronic Research (NCAER) findings, the number of middle-class households is expected to reach 53.3 million by 2015, from the current level of 31.4 million. By 2025, it is likely to grow to 113.8 million.
NCAER figures indicate that currently only 52% of these households possess air conditioners, which allows for an immense opportunity for AC manufacturers in India. The “bottom-of-the-pyramid” (BOP) income section is also a potential market as only 9% of households in this category are equipped with AC.

According to a recent study by The Associated Chambers of Commerce and Industry in India (ASSOCHAM), about 4.2 million room-AC units were sold in India in 2011, and about 68% of all units sold were split air conditioners. There has been a gradual decline in the window AC market over the last 2-3 years and real estate developers have often ceased giving the provision to install window ACs in their projects. Portable AC units currently have a limited penetration but have a great potential in the long term as not all rooms can accommodate split AC systems.

The commercial and industrial market is dominated by air-handling units (AHU), packaged units, duct units, fan-coil units, chiller units and variable refrigerant units, all of which are witnessing growth in India, due to the rise in construction activities and industrial expansion. In 2011, the Indian commercial and industrial HVAC products market was worth almost 500 000€, but is expected to grow at a compound annual growth rate (CAGR) of 16.9% till 2015.

AHU, duct/packaged unit and chiller market segments are fragmented, whereas variable refrigerant flow (VRF) and vapour absorption machine (VAM) segments are more integrated and organized. Trends suggest there is an immense potential here as the market has not yet been penetrated. VRF is expected to eventually replace duct/packaged units and less-efficient chillers and other systems. | P: +33 4 93 00 61 89