Automotive HVAC Market

Market Overview

The global Automotive HVAC market size was valued at USD 50.63 billion in 2022. It is estimated to reach USD 80.59 billion by 2031, growing at a CAGR of 5.3% during the forecast period (2023–2031). Factors like the increased demand for thermal systems and automatic climate control features in automobiles and the rise in safety and comfort due to the adoption of HVAC Systems promote the market’s growth.

The heating, ventilation, and air conditioning (HVAC) system controls the temperature inside the car. It has three subsystems: heating, cooling, and air conditioning. These work together to clean the air inside the car and keep drivers and passengers comfortable. It controls the temperature of the air, checks the amount of wetness in the air, and gets rid of too much humidity from the moving air. Companies with a long history, like Audi, Mercedes, and BMW, focus on making HVAC systems that are customizable and easy for customers to use. For example, the BMW 6 Series has automatic air conditioning, including air distribution for the driver and passengers, a fogging monitor, and an automatic temperature control system.

A vehicle HVAC system is a main unit comprising a compressor, condenser, evaporator, pressure regulators, orifice tube, thermal expansion valve, receiver-drier, and accumulator. The compressor is the most important part of the car's HVAC system. It is a pump hooked up to the engine and driven by a belt. The compressor helps to squeeze the refrigerant gas and move it. A radiator helps remove heat and is usually in the front of the car. When hot, compressed gases are put into the top of a condenser, they are quickly cooled. When the cooling is done, the gases collect and leave the bottom of the condenser as a high-pressure fluid. The evaporator is a part of the HVAC system that takes in heat. The main job of an evaporator is to get rid of the heat inside the car and reduce the amount of moisture in the air. By controlling the flow and pressure of the refrigerant into the evaporator, pressure-regulating devices set the temperature of the evaporator.

Market Dynamics

Global Automotive HVAC Market Drivers:

Increase in Demand for Thermal Systems and Automatic Climate Control Features in Automobile

Thermal comfort in vehicles is considered one of the most important factors when purchasing a vehicle. Installing an HVAC system ensures an ambient thermal environment for the driver and the passenger. The HVAC system not only makes the temperature more comfortable but also makes air cooling more efficient, saving fuel. Heating, ventilation, and air conditioning (HVAC) systems that work well ensure that the temperature in a car is just right. This can improve the comfort of the passengers, the fuel economy, and other things. The vehicle HVAC market is also growing because more people are using automatic air conditioning, which automatically sets the temperature inside the car no matter what the temperature and humidity are outside. So, the global vehicle HVAC market's growth will likely be driven by a rise in the demand for thermal comfort and an increase in the number of cars with automatic HVAC systems.

Rise in Safety and Comfort Due to Adoption of HVAC Systems

More people want safety, ease, and good looks in their cars, leading to several technological improvements. HVAC systems ensure a comfortable ride for the driver and the passenger. In addition, the system contributes toward defrosting windows, demisting windshields, and dehumidifying air, improving the passengers' comfort. The safe and clean running of the system eliminates risk factors in the future. Thus, an increase in safety due to adopting HVAC systems that provide safe and favorable conditions inside the vehicle cabin is anticipated to propel market growth.

Global Automotive HVAC Market Restraint:

High Maintenance Cost

If it breaks, the HVAC system unit is very expensive to install and fix. Installation of an HVAC unit in a vehicle increases the overall cost of the automobile. An automobile HVAC unit comprises a compressor, condensers, evaporators, and other components. Regular maintenance is required to keep these components in good working condition, which is significantly expensive. The highly expensive part of the system is the compressor, which needs the right amount of gas and cleaning to keep it from breaking down too soon. So, the high cost of maintaining all of the HVAC system's parts is expected to slow down the growth of the global vehicle HVAC market.

Global Automotive HVAC Market Opportunities:

Adoption of Eco-Friendly Refrigerants

Putting R744/CO2 and other environmentally friendly refrigerants in cars would not only help the market for vehicle HVAC systems grow but also help save the environment. Using alternative refrigerants like R744 and CO2 would make cars use less gas and cause less smog, which would benefit the earth. For example, Sanden Automotive Components Corporation finished making and developing compressors for cars' air conditioning systems that use CO2 gas in May 2017. So, using environmentally friendly refrigerants in cars is a huge growth chance for the major players in the market.

Regional Analysis

The global Automotive HVAC market is bifurcated based on region into North America, Europe, Asia-Pacific, and LAMEA.

Asia-Pacific Dominates the Global Market

Asia-Pacific is the most significant global market shareholder and is estimated to grow at a CAGR of 5.6% over the forecast period. Asia-Pacific has witnessed an increase in the adoption of low, mid, and high-end vehicles. The Asia-Pacific market is the most promising as most emerging countries, such as China, India, Japan, and others, are a part of this region. The increase in several automotive manufacturing plants and demand for automatic and manual types of HVAC systems significantly contributed to the growth of the Asian market. This is also expected to boost the market growth in the coming years. Availability of raw materials, cheap labor costs, and increased disposable income have a major impact on the Automotive HVAC market.

Additionally, an increase in disposable income in Asian countries boosts automotive sales in this region. The automotive safety features equipment manufacturers focus on developing newer products to meet changes in consumer demands in this region. Automobile manufacturers are actively developing newer products to meet consumer demands in this region. Also, this region's increased automobile sales and rapid industrialization are key growth factors for the global Automotive HVAC market.

North America holds the third position after Asia-Pacific and Europe in revenue generation for the in-dash navigation system market, with the U.S. being the dominant country. However, Mexico is expected to grow substantially during the forecast period. In recent years, environmental consciousness has grown in the North American automotive market, thereby enabling the production of fuel-efficient automotive heating, ventilation, and air conditioning (HVAC) systems.

Furthermore, manufacturers such as Sanden Corporation, DENSO Corporation, and MAHLE have adopted the standards to ban hydrofluorocarbons (HFCs) that deplete the ozone layer and have accepted fuel-efficient and eco-friendly refrigerants. Moreover, in the past ten years, the Mexican government legalized the reduction in CO2 emissions for all automobiles, including cars, LCVs, and HCVs. North America has been dominating other regions in terms of vehicle production. German companies such as General Motors and BMW are investing in Mexico since the region is labor-friendly. More investment in North America will strengthen the overall Automotive HVAC production.

Europe's automobiles, including cars, vans, trucks, and buses, are manufactured with lower CO2 and GHG levels and are considered the safest, tidiest, and quietest in the world. Out of the total vehicle sales worldwide, Europe contributed around 23.6% of the total market share after Asia-Pacific. Total vehicle sales in this region were 20,548,444 units, of which 18,530,783 were passenger cars, and 2,017,661 were commercial vehicles comprising light commercial vehicles and heavy commercial vehicles. The manufacturers and suppliers will have to reduce the emission level of CO2 by manufacturing fuel-efficient HVAC systems to achieve the set target of 95 grams of CO2 per kilometer by 2021. This would help reduce environmental contamination and save fuel.

In addition, the increase in the adoption rate of fuel-efficient and eco-friendly vehicles in the region is anticipated to boost market growth. In addition, technological developments and a rise in demand for commercial vehicles from countries including Russia, Italy, Sweden, and others are expected to propel the market growth shortly.

LAMEA experienced significant growth due to the steady development of countries in this region. LAMEA holds the smallest share of the Automotive HVAC market. Nevertheless, the fastest growth rate is anticipated during the forecast period. LAMEA has witnessed a steady improvement in economies in the past few years due to a rise in consumers' standard of living and disposable income. This is the key growth factor for this region's HVAC system-related components market. The rise in automotive sales and the transitioning economy of LAMEA are anticipated to create lucrative opportunities for the global Automotive HVAC market in the coming years. Economic development and the development of the automobile industry in developing countries in this region are positive growth factors for the Automotive HVAC market. Furthermore, a drastic rise in the use of super, hybrid, and premium cars in economically developed countries of LAMEA, such as Saudi Arabia, South Africa, and the UAE, is observed. Thus, automobile manufacturers in this region are estimated to cause a surge in demand for different types of HVAC systems and their related components to deliver premium comfort to passengers.

Segmental Analysis

The global Automotive HVAC market is segmented based on technology, vehicle type, component,

The global Automotive HVAC market is bifurcated into automatic and manual HVAC systems based on technology.

The Automatic HVAC segment dominates the global market and will likely exhibit a CAGR of 5.6% CAGR over the forecast period. The automatic climate control system is the most advanced of all car air conditioning systems. An automatic air conditioning system is extremely user-friendly and hassle-free to operate. Passengers benefit from the facility that they can set the cabin temperature. Moreover, when the passenger selects the automatic function key, the automatic HVAC system adjusts the temperature automatically depending on the outside temperature for the rest of the journey. In addition, the blower speed and mode levels are automatically adjusted. Automatic HVAC systems are predominantly used in certain mid and high-segment cars. For instance, DENSO Corporation offers HVAC units to the Hyundai group, allowing Hyundai Creta to provide an automatic climate control system and ensure a comfortable environment in the vehicle cabin.

Moreover, Maruti Suzuki offers this best feature in S-Cross for the comfort of passengers. MAHLE Behr produces HVAC systems for optimum air distribution in the cabin and delivers modules as per customer specifications. The module includes a climate box, control panel, piping, heater and evaporator, and rear blower, providing brilliant cooling and heating performance with low noise. Automakers focus on dual-zone HVAC systems in the vehicle's cabin, which is expected to increase the system's adoption. Some advanced systems also offer dual-zone climate control with automatic re-circulation mode. This allows the driver and passengers to set the desired temperature for a comfortable interior environment.

The global Automotive HVAC market is bifurcated based on vehicle type into Passenger, commercial, and electric vehicles.

The passenger vehicle segment owns the global market and will likely exhibit a CAGR of 5.2% over the forecast period. The passenger car segment includes small cars, hatchbacks, sedans, luxury sedans, and others for transporting people. Major global players are concentrating on passenger and luxurious cars such as SUVs. The increase in consumers' disposable income and the production and sale of four-wheeler vehicles are responsible for adopting HVAC systems equipped in passenger cars. The leading automotive industry players in passenger vehicles majorly adopt automatic and manual technologies. The HVAC system can be operated via manual and fully automatic control systems.

HVAC systems in cars such as the Maruti Suzuki Alto K10, Maruti Suzuki Wagon R, Hyundai Eon, Hyundai i10, Datsun GO, and Maruti Suzuki Celerio are manually operated. However, Hyundai Creta, Renault Duster, and Mahindra TUV300 systems are automatically controlled. Currently, every car, be it a passenger or luxury car such as Audi, BMW, and Porsche, offers a complete HVAC system to the customers to provide them ease and comfort. Air conditioners in passenger cars consist of a compressor, condenser, control device, and air conditioning unit, and the HVAC unit combines the functions of these units to provide favorable conditions inside the cabin.

Based on components, the global Automotive HVAC market is segmented into Evaporators, compressors, condensers, receiver-drier, expansion valves, and others.

The compressor segment dominates the global market and is predicted to exhibit a CAGR of 6.6% during the forecast period. The compressor is the most important component of an automotive HVAC system. It turns the refrigerant gas, generally Freon, into liquid form as it concentrates its heat. There is a huge demand for automotive compressors, which consume less power. Companies such as Denso Global and Toyota have focused on manufacturing efficient compressors. Automatic cooling and fuel-efficient features are in high demand in the automotive industry.

Recent Developments

• April 2023- Calsonic Kansei Corporation made a new HVAC system for cars that uses a refrigerant that is better for the earth than older refrigerants. The new refrigerant contributes less to global warming, making it a better choice for car HVAC systems.
• May 2023- Johnson Controls International PLC bought Sanden Holdings Corporation's car HVAC business. With this purchase, Johnson Controls will become the global car HVAC business leader.