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Saudi Arabia HVAC Market Overview
Saudi Arabia HVAC market is estimated at $1.9 billion in 2018, and is expected to advance at a CAGR of 4.5% during the forecast period of 2019–2024. Stabilization in oil prices, followed by growing infrastructure development projects across the country, along with rise in religious tourism are some of the major factors contributing to the growth of Saudi Arabia HVAC market.
Based on type, the market is categorized into heating, ventilation, and cooling. Of these, cooling category is estimated to hold the largest revenue share in 2018, and is projected to exhibit a strong growth rate during the forecast period. This can be mainly attributed to increasing development projects pertaining to metro stations, expansion of King Abdulaziz International Airport, and others.
Additionally, the heating category is further segmented into furnaces, heat pumps, boilers, and unitary heaters. Among these, furnaces category is estimated to hold the largest revenue share in the market, in 2018. However, heat pumps sub-category is projected to register the fastest CAGR, during the forecast period. This can be attributed to its high efficiency and low maintenance cost.
Based on region, Saudi Arabia HVAC market is divided into western, central, eastern, and southern. Out of these, western Saudi Arabia market is projected to record the fastest growth rate during the forecast period. This can be attributed to major infrastructure development projects in cities such as Jeddah, Makkah, Madinah, and Tabuk region. Some of the infrastructure projects include development of $500 billion worth NEOM city at Tabuk region, $8 billion Red Sea project, and $4.8 billion Jeddah downtown residential complex. These developments are being made on the back of Saudi Vision 2030, where the government intends to diversify its economy which is currently depended on oil and gas sector.
Saudi Arabia HVAC Market Dynamics
The key trend observed in the Saudi Arabia HVAC market is the growing popularity of district cooling system. District cooling system produce hot water or chilled water at a central plant and distributes energy out to the building for heating, and cooling. Moreover, district cooling system consumes almost 50% less electricity as compared to regular cooling system which reduce the overall energy costs of consumer. In Saudi Arabia, almost 70% of the entire power is consumed by air conditioning systems. Hence, customers are focusing more toward energy-efficient air conditioning systems which is further aiding the growth in demand for district cooling system in the country.
Saudi Arabia HVAC market is driven by increasing spending toward infrastructure. In Saudi Arabia, there are several ongoing projects pertaining to metro railway expansions, and construction of airports. For instance, Riyadh Metro, a nearly $23 billion project, is under-construction and would be fully operational by 2021. It would consist of six lines spanning a total length of around 109.4 miles across the city, with 85 stations. As, HVAC systems are installed at metro stations, airports, offices, and buildings to control temperature, thus increasing infrastructure spending would drive the demand for HVAC systems in the country.
A major opportunity for the growth of the players operating in Saudi Arabia HVAC Market is the growing popularity of ground source HVAC systems. Ground source HVAC systems do not produce any carbon monoxide or any other greenhouse gases that contributes both to increasing carbon footprint and air pollution. In addition, presently adoption of geothermal heat pump or ground source heat pump is increasing and expected to record CAGR of 7.9%, during the forecast period, which would further support the growth of ground source HVAC systems in the country.
Saudi Arabia HVAC Market Competitive Landscape
In the recent past, players in the Saudi Arabia HVAC market have particularly focused on product launches to expand their customer base. For instance, In February 2019, Daikin Industries Ltd., launched Daikin Perfera FTXM-NDEU18-046, an air to air heat pump. This heat pump is equipped with R-32 refrigerant technology. Furthermore, HVAC companies are focusing on strengthening their position in the market via mergers and acquisitions.
Some of the key players operating in the Saudi Arabia HVAC market include Johnson Controls International plc, LG Electronics Inc., Mitsubishi Electric Corporation, Gree Electric Appliances Inc. of Zhuhai, Ingersoll-Rand plc, Danfoss A/S, United Technologies Corporation, Midea Group Co. Ltd. Daikin Industries Ltd., Zamil Air Conditioners, and S.K.M Air Conditioning LLC.