Saudi Arabia HVAC Market Size & Share Analysis - Trends, Drivers, Competitive Landscape, and Forecasts (2024 - 2030)

Saudi Arabia HVAC Industry Trends & Drivers

Increasing Preference for Smart HVAC Systems

• The increasing preference for smart HVAC systems is a key trend in the market. To reduce energy consumption and strengthen sustainability, a large number of customers are turning to adopt smart HVAC technologies. Smart HVAC systems offer better controls, advanced monitoring systems, and smart thermostats. These systems also provide better temperature variability and produce cleaner air compared to conventional HVAC systems. Users can monitor their real-time performance as well.
•  In addition, smart HVAC systems produce less noise than other systems. Thus, due to the increasing demand for sophisticated and energy-efficient technologies in the country, smart HVAC systems are trending.

Increasing Need to Minimize Food Wastage

• Food loss and waste (FLW) has a significant economic, environmental, and social impact. It is a major worry for Saudi Arabia, as the country imports the majority of the agricultural goods it consumes. Under the umbrella of the G20 Meeting of Agricultural Chief Scientists (MACS), the Ministry of Environment, Water and Agriculture hosted a regional workshop on FLW in collaboration with the Thünen Institute in Germany to raise awareness of food loss and wastage among Gulf Cooperation Council (GCC) countries.
• To minimize food losses, the region's environmental circumstances need the creation of suitable and appropriate cold-chain storage facilities for balanced distribution through the cold-storage transportation facilities along the food supply chain.
• Moreover, initiatives and activities to change attitudes toward lowering FLW through the use of HVAC systems, as well as promote sustainable and energy-efficient systems, are needed. As a result, there is a surging need to prevent food waste, which will help the Saudi Arabian refrigeration industry. Major market players are expanding their product portfolios by providing advanced HVAC systems to meet the rising demand for refrigeration devices.

Phasing Out of HCFC Refrigerants

• Phasing out hydrochlorofluorocarbon (HCFC) refrigerants would hinder the growth of the HVAC market in the country. Adhering to the Montreal Protocol, the country is diminishing the use of HCFCs, which are found to be a primary reason for global warming. Still, a large number of HVAC systems have HCFC refrigerants. Due to the ban on HCFCs, HVAC manufacturing companies are investing heavily in developing alternative technologies, which would reduce the profit margin for them and raise the prices for consumers. Further, due to the phaseout of HCFC refrigerants, the unsold stock of the phased-out HCFC refrigerant-based HVAC systems would also reduce the profit margin.
• Furthermore, HVAC manufacturing companies need to train their service personnel with new technologies for installation and repairing new HVAC systems, which would further increase the expenses.

Saudi Arabian HVAC Industry Outlook

Offering Insights

• The equipment category held the larger market share, of around 75% in 2023. The country's strong demand for new equipment is owing to its harsh climate.
• Furthermore, the rising in the number of commercial and other construction projects propels HVAC system sales in the kingdom.
• For instance, the Qiddiya project in Riyadh began in 2019, and it is expected to be completed in 2030. This Public Investment Fund project, which is around 45 kilometers from Riyadh, intends to become the "capital of entertainment, sports, and the arts." The project has already received USD 8 billion in funding, and it plans on hosting 17 million annual visitors by 2035.
• More infrastructure development projects are scheduled to be undertaken in the future as part of the country's economic zone development plans.
• The services category is projected to grow at the higher CAGR, of 8.8%, during 2024–2030. The services market is categorized into upgradation/replacement, maintenance and repair, installation, and consulting. The upgradation/replacement category held the largest revenue share, of around 35%, in 2023. Modern air conditioners are durable, but their major components deteriorate after around 10 years, depending on the usage of the systems. Hence, it is better to replace or upgrade them. With the emergence of new technologies, the best-suited option is to upgrade or replace the old system with a new one with additional features such as better air quality.

During the study, we have analyzed the following offerings in the report:

• Equipment (Larger Category)
  • Heating
    • Heat pumps
      • Air-source
      • Water-source
      • Ground-source
    • Furnaces
      • Gasoline
      • Propane
      • Electric
    • Boilers
      • Water-tube
      • Fire-tube
    • Unitary heaters
  • Ventilation
    • Ventilation fans
      • Centrifugal fans
      • Axial fans
      • Domestic exhaust fans
      • Power roof fans
    • Air handling units (AHUs) and fan coil units (FCUs)
      • AHUs
        • Terminal units
        • Makeup air units
        • Rooftop units
      • FCUs
        • Two-pipe
        • Four-pipe
    • Humidifiers/dehumidifiers
    • Air cleaners
      • Type 1: HEPA + carbon
      • Type 2: HEPA + carbon + ionizer
      • Type 3: HEPA + carbon + UV
      • Type 4: HEPA + carbon + ionizer + UV
      • Type 5: Other technologies
  • Cooling
    • Room air conditioners (ACs)
      • Mini-splits
      • Window ACs
    • Split units
    • Ducted splits
      • Water-cooled condensers
      • Air-cooled condensers
    • Packaged units
      • Water-cooled condensers
      • Air-cooled condensers
    • Variable refrigerant flow (VRF) systems
      • Heat pump systems
      • Heat recovery systems
    • Chillers
      • Centrifugal
      • Screw
      • Scroll
      • Absorption
      • Reciprocating
• Service (Faster-Growing Category)
  • Upgradation/replacement
  • Maintenance and repair
  • Installation
  • Consulting

End User Analysis

• The commercial category held the largest market share, of around 45%, in 2023. The Saudi government is providing considerable support to the corporate and hospitality industries in order to minimize its reliance on the oil trade. As a result of the growing number of hotels, resorts, and office buildings, the commercial sector's demand for these equipment’s and services is increasing.
• The infrastructure investments by the government and private parties also fuel the market.
• For example, projects such as the USD 26.6-billion enlargement of Mecca's Grand Mosque and the USD 16.5-billion Haramein high-speed railway connecting Mecca and Medina are currently underway. These developments are intended to boost religious tourism in the country, with 25 million visitors expected to visit the holy places each year by 2025. Thus, the infrastructure improvements in the commercial sector are expected to be a major driver for the commercial HVAC market's growth in the kingdom.
• Furthermore, the Saudi Arabian hospitality sector is registering unprecedented growth year-on-year, as the country gears up for Vision 2030, which aims to bring around 30 million visitors annually. The government is also investing in the religious tourism program, with around 23,000 rooms under construction and over 30,000 in the pipeline in Makkah. This is projected to drive the demand for HVAC systems in hospitality facilities in the coming years.
• The residential category is projected to witness the highest CAGR, of 9.2%, during 2024–2030 in the market. There are many ongoing residential projects in Saudi Arabia. The residential skyscraper projects include Jeddah Tower, Diamond Tower, and Al Zamil Residential Tower, which are either under construction or in the pipeline and will contribute to the high demand for HVAC systems during the forecast period.

Below are the major end users analyzed in the report:

• Commercial (Largest Category)
  • Office buildings
  • Hospitality facilities
  • Transportation structures
  • Supermarkets/hypermarkets
  • Healthcare settings
  • Educational institutions
  • Others (include data centers, banks, departmental stores, and convenience stores)
• Industrial
  • Food and beverage facilities
  • Oil and gas structures
  • Automotive units
  • Energy and utility plants
  • Others (include electronics, textile, and chemical, and cement facilities)
• Residential (Fastest-Growing Category)

Market Nature - Moderately Fragmented

The Saudi Arabian HVAC market is competitive and nearly fragmented in nature, with the presence of several global and local HVAC manufacturers. Factors such as the increasing building construction, surging infrastructure spending, and growing tourism industry are opening up new opportunities for HVAC players in the country and have led to an increase in the competition among market players. Moreover, competitiveness in the industry majorly depends on factors such as system and service performance, quality, energy efficiency, brand reputation, price, design, goodwill, technology, application engineering capability, and construction or project management expertise.

Saudi Arabia HVAC Industry News

• Carrier Global Corporation has introduced the AquaEdge 19MV, a water-cooled centrifugal chiller with oil-free magnetic bearings, which aims to improve buildings’ energy management by allowing HVAC systems, building operations, and data to be optimized.
• Trane Technologies plc has introduced the Sintesis Balance CMAF, an electric single unit for heating and cooling buildings. This system is designed for facilities that need to maintain varying temperatures, such as schools, hotels, hospitals, shopping malls, business buildings, and theaters. The system was first launched in Europe, the Middle East, and Africa.
• Daikin Industries Ltd. has launched a new series of air purifiers, the MC55 series, for the MEA region. The system is equipped with a three-stage filtration, including a 99.99% efficient HEPA filter.