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Automotive HVAC Market - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

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  • 100 Pages
  • June 2022
  • Region: Global
  • Mordor Intelligence
  • ID: 5318501
The automotive HVAC market was valued at USD 53.78 billion in 2021, and it is expected to reach a value of USD 77.95 billion by 2027, registering a CAGR of 6.39% during the Forecasts period (2022-2027).

The automotive goods and supply chain market were drastically impacted by COVID-19. Also, travel restrictions and lockdowns saw the demand sales passenger vehicle slow down, which directly affected the HVAC market. However, post lockdown, factory operations, and workforce for infotainment manufacturing companies have regained momentum. Earlier, the use of automotive HVAC systems was considered a luxury, and not all automobiles were fitted with HVAC. However, it is now a prerequisite feature in every automobile due to the basic automotive safety and comfort standards accepted globally.

Over the long term, a rise in demand for thermal comfort and an increase in safety due to the adoption of HVAC systems are expected to boost the growth of the automotive HVAC market. A reduction in system size and weight of the system may support the growth of the market over the coming years. The integration of electronics, sensors, and automated climate control features at a lesser cost is translating into greater adoption of HVAC units in passenger vehicles. Rising vehicle electrification is likely to increase an integration of advanced comfort and safety features in vehicle.

Technological innovations and substantial investments in R&D initiatives are poised to enhance players' offerings and technological capabilities. Furthermore, the adoption of eco-friendly refrigerants and the production of cheaper HVAC systems provide lucrative growth opportunities for the players operating in the automotive HVAC market. Major players are introducing advanced HVAC system in vehicle which help to fight against fine particulates in vehicle cabin. For instance,

Key Highlights

  • In August 2021, Valeo announced New Valeo heat pump that procures two-thirds of its energy demand from the ambient air, thereby limiting the need to draw energy from the onboard batteries, and uses a natural refrigerant. EVs equipped with the device can travel up to 30% further at -15°C than those fitted with more conventional heating systems.
The Asia-Pacific region is expected to be the largest segment in the automotive HVAC market owing to the large vehicle production levels in countries such as China, India, and Japan. North America is forecasted to create new growth prospects for the manufacturers in the coming years. The European market is showing slow but steady growth and is expected to reach pre-meltdown levels over the period of the next five years.

Key Market Trends

Innovations to Provide New Opportunities

Growing concerns about global warming have slightly impacted the automotive HVAC market. Consequently, many nations worldwide have started taking measures to reduce their carbon footprints.

The augmenting research and developments in the automotive sector across the world are set to enhance the technological capabilities of the market players. These market players are introducing advanced technologies in automotive HVAC to develop new products that impart a competitive edge in the market. The competitors in the market are developing eco-friendly products to fall in line with the stringent government regulations regarding emissions. Energy efficacy is the other parameter driving growth in HVAC systems. Manufacturers are increasingly using green technologies to develop eco-friendly and energy-efficient automotive HVAC systems. For Instance,
  • In November 2021, Marelli Corporation has developed an Indoor Air Quality (IAQ) Purification System, which kills bacteria and viruses in vehicles and indoor environments. The system utilizes UV-A and UV-C light combined with a titanium dioxide (TiO2) filter to destroy airborne bacteria and viruses, including COVID-19, with greater than 99% effectiveness within 15 minutes.
Market players are involved in mergers and acquisitions to expand their market presence. For instance, Denso collaborated with Toyota to develop Prius, a hybrid technology promoting safety, fuel efficiency, and green technology in vehicles.

High Growth Anticipated in the Asia-Pacific Region

The Asia-Pacific market is probably going to observe huge development attributable to the nearness of key automotive makers, vast scale generation of vehicles, and spiraling vehicle requests in the manufacturing countries, like India, South Korea, and China. Government activities to restore the automotive business are required to drive the market during the forthcoming year. For example, the Government of India is encouraging foreign investments through programmed courses in the automotive area to bring new innovations to market.

China is one of the largest markets and contributes significantly to the demand for these automotive HVAC systems. The increasing demand for passenger vehicles from India, China, and their other counterparts in the Asia-Pacific region is a result of the growing preferences of people for comfort and safety. These factors are expected to contribute to the market growth in the region. Consumers are aligning toward high specification vehicles that offer par comfort features. In addition, there is an upsurge in vehicle production by foreign companies in countries, including Thailand and Malaysia.

According to the China Automobile Dealers Association (CADA), the luxury car dealers in the country sold 278,000 vehicles in August 2021, an 9.4% decrease year-on-year. The semiconductor chip shortage was the prime reason for this thump in sales which was continued over the October 2021 whereas, the companies have restructured their supply chain to overcome this issue in order to render the growing demand.

Competitive Landscape

The automotive HVAC market is consolidated, with the top global players accounting for most of the market share. The major companies in the air-conditioning market include MAHLE GmbH, DENSO Corporation, Mitsubishi Heavy Industries Ltd, and Hanon Systems. Mergers and acquisitions, partnerships with regional HVAC equipment manufacturers, and establishing and ensuring tie-ups with car manufacturers are some of the dynamics shaping the market's competitive landscape. For instance:
  • In November 2021, Hanon System inaugurated its two new establishments in Hungary - a new greenfield production facility in Pécs and a building expansion in Rétság. The facility provides 22,464 square meters of manufacturing space and accommodates equipment including forming, brazing, welding and bending, assembly lines and testing for automotive air conditioning (A/C) lines.
  • In October 2020, Mahle has signed a purchase agreement with Japanese company Keihin Corporation to take over its air conditioning business in Japan, Thailand, and the USA. With this agreement, MAHLE strengthening its global footprint in air conditioning technology and improving its market access, particularly in Japan and Southeast Asia
  • In March 2020, Swegon, a UK-based HVAC manufacturer, acquired air terminal specialist Waterloo Air Products. The acquisition deal will give the company air terminal range and expertise in the custom-building segment.
  • In March 2020, Gardner Denver completed the merger with Ingersoll Rand’s Industrial segment to significantly dominate the mission-critical flow control and industrial technologies market by developing an extended product portfolio.

Additional Benefits:

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Table of Contents

1.1 Study Assumptions
1.2 Scope of the Study
4.1 Market Drivers
4.2 Market Restraints
4.3 Industry Attractiveness - Porter's Five Forces Analysis
4.3.1 Bargaining Power of Suppliers
4.3.2 Bargaining Power of Consumers
4.3.3 Threat of New Entrants
4.3.4 Threat of Substitute Products
4.3.5 Intensity of Competitive Rivalry
5.1 By Technology Type
5.1.1 Manual/Semi-automatic HVAC
5.1.2 Automatic HVAC
5.2 By Vehicle Type
5.2.1 Passenger Cars
5.2.2 Commercial Vehicles
5.3 By Geography
5.3.1 North America United States Canada Rest of North America
5.3.2 Europe Germany United Kingdom France Rest of Europe
5.3.3 Asia-Pacific China India Japan South Korea Rest of Asia-Pacific
5.3.4 South America Brazil Argentina Rest of South America
5.3.5 Middle-East and Africa United Arab Emirates South Africa Saudi Arabia Rest of Middle-East and Africa
6.1 Vendor Market Share
6.2 Company Profiles*
6.2.1 Valeo Group
6.2.2 Denso Corporation
6.2.3 Mahle GmbH
6.2.4 Marelli Corporation
6.2.5 Sanden Corporation
6.2.6 Keihin Corporation
6.2.7 Japan Climate Systems Corporation
6.2.8 Mitsubishi Heavy Industries Ltd
6.2.9 Hanon Systems Corp.
6.2.10 Samvardhana Motherson Group
6.2.11 Hella GmbH & KGaA

Companies Mentioned

A selection of companies mentioned in this report includes:

  • Valeo Group
  • Denso Corporation
  • Mahle GmbH
  • Marelli Corporation
  • Sanden Corporation
  • Keihin Corporation
  • Japan Climate Systems Corporation
  • Mitsubishi Heavy Industries Ltd
  • Hanon Systems Corp.
  • Samvardhana Motherson Group
  • Hella GmbH & KGaA