Transparency Market Research has released a report predicting that the global split air conditioning systems market will reach $US127.27 billion in 2024.
The market was valued at $US79.72 bn in 2015 which means it will expand at a CAGR of 5.1 per cent from 2016 to 2024.
In terms of equipment type, the segment of mono-split systems accounted for almost 70 per cent of the market share in terms of revenue in 2015. Based on geography, the Asia-Pacific region emerged as the dominant segment in the split air conditioning systems and the trend is expected to continue over the forecast period as well.
The report said that the rising demand for energy-efficient air conditioning systems is the key to market growth.
In mature markets such as North America and Europe, energy efficiency has been a major concern with the use of conventional air conditioning systems. Growing awareness among consumers regarding energy efficient models is the key force boosting the growth prospects of the split air conditioning systems market.
Additionally, the growth in the commercial and residential segment in Asia-Pacific has resulted in a vast rise in demand for split air conditioning systems in the region.
One downside identified by the report is intense price competition which is resulting in decreased profit margins for a number of players. Crunched profit margins have a direct negative impact on investments made for research and other activities, which can have a diminishing effect on the overall growth of the market in the long run.
"In addition to the presence of a large number of companies in the global split air conditioner systems market, the situation has worsened due to the abundance of domestic manufacturers in China who sell their products at lower costs as compared to the products of global brands," the report said.
"Moreover, rising concerns regarding the vast amount of electricity consumed to power air conditioning systems of all kinds could emerge as a key challenge for the global split air conditioning systems market. These factors may slow down the growth of air conditioning systems market globally in the next few years."
The highly dynamic and intensely competitive global split air conditioner systems market features some of the world's dominant electronics and technology companies. The report said companies are also looking at prospects of enhancing their businesses through partnerships and optimizing overseas business networks.
A recent example is the joint venture of Midea Group with Lihom Cuchen, a renowned appliances manufacturer from South Korea in February 2016 with the aim of pursuing unique benefits in research and development, technology, manufacturing, patent sharing, and expanding its global presence.