Published Date: Feb 2024


The condensing unit market across Asia Pacific region is projected to witness robust growth over the coming years according to a recent report by XYZ Research. Various macroeconomic and industry specific factors are expected to fuel demand for condensing units from both residential and commercial sector in the region.

Residential Sector to Drive Significant Gains

Rising population, rapid urbanization and improving economic conditions are enhancing consumer purchasing power in emerging economies of Asia Pacific. This is translating into higher sales of refrigerators, air conditioners, chillers and other appliances requiring condensing units. With a large consumer base and surging middle class, countries like India, China, Indonesia and Vietnam will contribute substantially to residential condensing unit sales.

The residential condensing unit market in Asia Pacific is estimated to increase at a compound annual growth rate of over 7% during 2022-2027. Replacement demand from the existing installed base along with new construction activities are key growth levers. Major appliance manufacturers are expanding their production capacities and distribution networks across Tier 2 and Tier 3 cities to tap into opportunities in rural areas.

Commercial & Industrial Segment Emerging as New Growth Avenue

Strong economic growth, infrastructure development projects, expansion of retail and hospitality sectors are propelling demand from commercial and industrial verticals. The Asia Pacific commercial condensing unit market is projected to witness annual gains of around 6-8% over the next five years. Rapidly growing number of shopping malls, hotels, hospitals, corporate parks and manufacturing facilities are installing central AC and refrigeration systems equipped with condensing units.

China and India Commercial Sector to Drive Momentum

China and India are at the forefront of commercial construction boom underway in Asia Pacific region. Rapid expansion of organized retail, tourism and healthcare industries in these nations is working in favor of commercial condensing unit manufacturers. Growing infrastructure spending on sectors like transport, power and telecom is also catalyzing industrial condensing unit deployment.

Furthermore, rising penetration of district cooling systems especially in urban centers of China, UAE, Singapore, Malaysia and Indonesia will spur demand for large capacity condensing units from tertiary sector. Stringent energy efficiency regulations including refrigerant gas phase-outs are prompting facilities managers to replace ageing condensing units with eco-friendly models.

Emerging Product Categories to Widen Market

Commercialization of newer technologies such as variable refrigerant flow (VRF) systems and heat pump water heaters is opening up new application avenues for high efficiency condensing units. VRF is gaining rapid popularity across Asia Pacific due to its ability to condition zones independently with optimized energy usage. Meanwhile, combination of air conditioners and water heaters equipped with condensing heating technology are enabling dual purpose functionality.

Consolidation Activity on the Rise

The condensing unit industry landscape across Asia Pacific is witnessing rising mergers and acquisitions involving both international and regional players. Large OEMs are acquiring local component manufacturers to establish backward integration and address supply chain issues. Meanwhile, regional entities are merging with each other to scale up operations and gain access to new export markets.

For instance, last year Daikin Industries acquired a majority stake in India’s leading AC and refrigeration company Lloyd Electric and Engineering to bolster its presence. Similarly, Kawasaki Heavy Industries merged its HVAC subsidiaries in Japan, Thailand and India under a new umbrella ‘Kawasaki Thermal Systems’ to optimize costs and management. Such consolidation moves are expected to intensify competition while strengthening key vendors’ manufacturing and distribution capabilities.

China Continues to Lead Regional Space

China currently represents over 35% of Asia Pacific condensing unit market owing to its massive industrial and construction machinery sectors. However, other emerging Asian nations are narrowing the gap through their rapidly growing economies and hot climate inducing higher cooling demand.

Over the long-run, shift towards variable speed compressors, eco-friendly refrigerants and smart controls will impact the regional technology landscape. Condensing unit producers are investing heavily in R&D to develop innovative product designs catering to performance, reliability and energy efficiency needs of Asia Pacific customers across application segments.

To summarize, various socio-economic factors are aligning favorably for Asia Pacific condensing unit market to gain strong momentum. Residential, commercial and industrial end-use verticals will contribute robustly to overall regional demand. Growing HVAC penetration, urbanization trends and policy push for sustainability are expected to propel Asia Pacific condensing unit sales at a healthy rate in the upcoming years.