Global HVAC Equipment Market to Reach USD 552.6 Billion by 2035 | Reports by Transparency Market Research

The global heating, ventilation, and air-conditioning (HVAC) equipment market is poised for significant expansion over the next decade. Valued at USD 310.4 billion in 2024, the industry is projected to grow at a compound annual growth rate (CAGR) of 5.5% from 2025 to 2035, ultimately reaching USD 552.6 billion by the end of 2035, according to the latest industry analysis.

This growth reflects the rapid pace of urbanization, stricter energy efficiency regulations, technological innovation, and rising demand for intelligent, connected HVAC solutions that enhance comfort, sustainability, and operational performance.

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Market Overview: HVAC systems play a critical role in maintaining indoor air quality, temperature regulation, and comfort across residential, commercial, industrial, and transportation sectors. These systems encompass a range of components, including heating equipment (such as furnaces, boilers, and heat pumps), cooling equipment (air conditioners, chillers, water cooling towers), and air delivery systems (ventilation fans, humidifiers, dehumidifiers).
As climate extremes and population density rise globally, HVAC systems have become essential infrastructure in both developed and emerging economies. The market's momentum is being bolstered by government initiatives toward energy-efficient buildings, smart city development, and sustainability compliance frameworks, driving the adoption of next-generation HVAC technologies.

Key Drivers of Market Growth

1. Rising Urbanization and Smart Infrastructure Development
The United Nations projects that 68% of the global population will reside in urban areas by 2050. This shift is reshaping HVAC market dynamics, as modern urban environments demand intelligent climate control systems that can integrate seamlessly with IoT-based building management systems (BMS).
Urban expansion across Asia-Pacific, the Middle East, and parts of Africa is fueling demand for high-capacity, energy-optimized HVAC systems in high-rise buildings, transportation hubs, hospitals, and smart cities. Governments' commitment to sustainable urban infrastructure is further driving the inclusion of HVAC systems within green building certification programs.

2. Growing Demand for Energy-Efficient HVAC Equipment
With global energy consumption and carbon emissions under scrutiny, building operations currently account for nearly 30% of total energy use, according to the International Energy Agency (IEA). HVAC systems alone represent a significant portion of this consumption.

The need to minimize energy waste has led to increased demand for high-efficiency, low-emission HVAC systems. Governments and utilities are incentivizing the adoption of advanced equipment through rebates and tax credits. Technologies such as variable refrigerant flow (VRF) systems, inverter-based compressors, and smart thermostats are reshaping efficiency benchmarks for both commercial and residential installations.

Latest Market Trends
The HVAC industry is undergoing rapid technological transformation. The integration of IoT (Internet of Things), AI (Artificial Intelligence), and data analytics is redefining how climate control systems are managed and maintained. Smart HVAC systems can now monitor performance, predict failures, and optimize energy consumption in real time through predictive maintenance tools and app-based control platforms.

Additionally, sustainability trends are encouraging manufacturers to adopt low-global-warming-potential (GWP) refrigerants and renewable energy-based HVAC solutions, including solar-assisted systems and hybrid heat pumps.
In the commercial sector, district cooling systems are gaining traction in urban areas as centralized, cost-efficient solutions for large-scale energy management.

Key Players and Industry Leaders

The global HVAC equipment landscape is dominated by key players who are continuously innovating to enhance energy performance and user experience. Prominent companies include:

• DAIKIN INDUSTRIES, Ltd
• Midea
• GREE Electric Appliances, Inc.
• Trane Technologies
• Carrier Global Corporation
• Mitsubishi Electric Corporation
• Johnson Controls
• Panasonic Holdings Corporation
• LG Electronics
• Lennox International Inc.
• Emerson Electric Co.
• Bosch Thermotechnik GmbH
• Haier Inc.
• Danfoss A/S
• Qingdao Hisense HVAC Equipment Co., Ltd.

These companies are strategically focusing on mergers, joint ventures, and R&D investments to strengthen their product portfolios and expand global reach.

Recent Developments

• Modine Manufacturing Company announced in May 2025 the acquisition of L.B. White for approximately US$112 million, expanding its presence in portable and agricultural heating solutions. The acquisition is expected to drive earnings growth through operational synergies.

• In December 2024, Daikin India entered into a joint venture with Rechi Precision, forming DAIKIN-RECHI India Pvt. Ltd. to assemble rotary compressors for residential HVAC systems. With an initial investment of US$1.8 million, the venture underscores Daikin's strategic focus on localized production in emerging markets.

• Copeland and Daikin jointly announced in November 2024 a partnership to introduce inverter swing rotary compressor technology to the U.S. residential market. The collaboration leverages Daikin's technical expertise and Copeland's manufacturing scale, with operations expected to commence in early 2025.
These developments signify the industry's emphasis on regional expansion, technology sharing, and innovation-driven growth.

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Market Opportunities and Challenges

Opportunities:
• Smart HVAC systems integrated with IoT for predictive maintenance and automated control.

• Rising demand for eco-friendly refrigerants and sustainable systems aligned with green building standards.

• Rapid commercial construction and infrastructure projects across Asia-Pacific and the Middle East.

• Emerging markets in Latin America and Africa where climate control systems are gaining penetration.

Challenges:
• High initial installation costs of advanced HVAC systems.
• Skilled labor shortages in handling modern and complex HVAC technologies.

• Fluctuating raw material prices and regulatory uncertainty regarding refrigerant transition compliance.

• Supply chain disruptions, particularly in the procurement of electronic components and semiconductors.

Despite these challenges, the overall market trajectory remains strongly positive, with innovation, digitalization, and policy support driving sustainable expansion.

Future Outlook

Looking ahead to 2035, the HVAC industry will evolve into a highly connected and sustainable ecosystem. Artificial intelligence and big data will play pivotal roles in transforming building environments into adaptive, energy-efficient spaces.
Asia-Pacific is forecasted to remain the largest and fastest-growing regional market, led by China, India, and Japan. The region's booming construction sector, combined with rising living standards, is expected to fuel unprecedented HVAC demand.

In North America and Europe, the focus will remain on retrofits, decarbonization, and green building compliance. The trend toward electrification of heating systems and renewable-powered cooling will gain strong momentum as climate commitments tighten globally.

Market Segmentation

The HVAC equipment market is segmented as follows:

By Equipment Type:
• Heating Equipment: Heat Pumps, Furnaces, Boilers, Unitary Heaters, Others

• Cooling Equipment: Air Conditioners, Chillers, Water Cooling Towers, Evaporative Coolers

• Air Delivery Equipment: Ventilation Fans, Humidifiers/Dehumidifiers, Air Pumps

By Application:
• New Construction
• Retrofits/Renovations

By End-use:
• Residential
• Commercial
• Industrial

By Distribution Channel:
• Direct Sales
• Indirect Sales

By Region:
• North America: U.S., Canada
• Europe: U.K., Germany, France, Italy, Spain
• Asia-Pacific: China, India, Japan, South Korea, Australia, ASEAN
• Middle East & Africa: GCC Countries, South Africa
• Latin America: Brazil, Mexico, Argentina

Regional Outlook

The Asia-Pacific region leads the global HVAC equipment market and is expected to maintain its dominance throughout the forecast period. Driven by industrialization, rapid urbanization, and supportive infrastructure policies, the region's expanding construction industry demands large-scale deployment of HVAC systems across residential, commercial, and industrial segments.

India's urban population is projected to surpass 600 million by 2036, accounting for 40% of the country's total population. Similarly, China's urbanization and industrial expansion are key contributors to regional growth. The rising middle-class population and climate variations across Southeast Asia further boost HVAC system installations.

Why Buy This Report?

• Comprehensive Coverage: The report provides in-depth market intelligence with detailed analysis across all equipment types, applications, and regional segments.

• Strategic Insights: Identifies emerging opportunities, market trends, and competitive strategies for stakeholders.

• Quantitative & Qualitative Data: Includes revenue projections, CAGR analysis, and extensive company profiling.

• Competitive Landscape: Offers a dashboard view of key players, their financial performance, business strategy, and market share.

• Regulatory & Policy Analysis: Examines global and regional regulations impacting HVAC efficiency standards and refrigerant transitions.

• Forward-looking Perspective: Equips decision-makers with actionable insights for investment, expansion, and innovation through 2035.

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