Automotive HVAC System Market Size Emerging Trends, New Growth Opportunities Status 2024-2032

Automotive HVAC System Market Size and Forecast

Automotive HVAC System Market size was valued at USD 19.15 Billion in 2024 and is projected to reach USD 32.18 Billion by 2031, growing at a CAGR of 6.70% from 2024 to 2031.

• Automotive HVAC (Heating, Ventilation, and Air Conditioning) is a system installed in automobiles that regulates the temperature, humidity, and air quality inside the cabin to ensure passenger comfort.
• It is made up of components such as a compressor, condenser, evaporator, expansion valve, and blower, which work together to chill the air by converting refrigerant from gas to liquid and back. Automotive HVAC also provides warmth by utilizing the heat produced by the engine.
• Furthermore, HVAC systems are now standard equipment in most automobiles, with advanced features such as automatic climate control and temperature zones for each occupant.

Global Automotive HVAC System Market Dynamics

The key market dynamics that are shaping the automotive HVAC system market include:

Key Market Drivers

• Increasing Global Vehicle Production: The increase in worldwide vehicle manufacturing is a major driver of the automotive HVAC system market. According to the International Organization of Motor Vehicle Manufacturers (OICA), worldwide vehicle production reached 80.1 million units in 2021, up 3% from 2020. This increase in vehicle production is directly correlated with the rising demand for automotive HVAC systems, which are now standard equipment in most vehicles.
• Rising Demand for Electric Vehicles (EVs): The rising popularity of electric vehicles is spurring advancements in automobile HVAC systems. According to the International Energy Agency (IEA), worldwide electric vehicle sales more than quadruple to 6.6 million by 2021, accounting for nearly 9% of the global automotive market. This transition to EVs needs the development of more efficient HVAC systems to reduce their influence on battery life and vehicles.
• Increasing Focus on Passenger Comfort and Air Quality: Increasing concern about air quality and comfort inside automobiles is driving demand for advanced HVAC systems. According to research conducted by the Society of Automotive Engineers (SAE), 85% of buyers prioritize in-cabin air quality when purchasing a vehicle. This trend has been driven by the COVID-19 pandemic, with a J.D. Power survey revealing that 62% of consumers are more likely to explore air quality features when purchasing their next car, spurring innovation and growth in the automotive HVAC system market.

Key Challenges:

• High Manufacturing and Installation Costs: The automotive HVAC system requires complicated design and engineering, resulting in high production and installation costs. Advanced technologies like automatic climate control and multi-zone systems necessitate expensive components and exact integration, which greatly raises the entire vehicle cost. This expensive burden discourages manufacturers from deploying cutting-edge HVAC systems, especially in low-cost vehicle segments, limiting market growth and innovation in the automotive segment.
• Maintenance and Repair Challenges: Automotive HVAC systems require routine maintenance to ensure peak performance, which is both costly and time-consuming. Compressors, condensers, and evaporators are susceptible to wear and tear, demanding regular inspections and repairs. Furthermore, issues like refrigerant leaks and blockages complicate servicing, resulting in longer downtimes and higher repair costs. These problems dissuade buyers from investing in automobiles equipped with modern HVAC systems, impacting overall market demand.
• Environmental Regulations and Compliance: The automotive HVAC industry is subject to rigorous environmental rules governing refrigerants and emissions. Many traditional refrigerants have been phased out due to their ozone-depleting effects and potential for global warming. Compliance with these requirements necessitates major investment in R&D to generate environmentally acceptable alternatives. This changeover is burdensome for manufacturers, potentially impeding the adoption of innovative HVAC technology and affecting overall market growth rates.

Key Trends:

• Growing Demand for Energy Efficiency: Environmental concerns and regulatory pressures are driving an increase in the demand for energy-efficient HVAC systems. Manufacturers are developing innovative technologies like variable refrigerant flow (VRF) and efficient compressors to improve energy efficiency. This trend not only serves to lower the overall carbon footprint of automobiles but also coincides with worldwide initiatives to reduce greenhouse gas emissions while retaining adequate temperature control in vehicles.
• Integration of Smart and Connected Features: Modern vehicles are increasingly equipped with smart and linked HVAC systems that take advantage of IoT (Internet of Things) capabilities. These technologies enable users to remotely manage and monitor their vehicle’s climate via mobile applications. Furthermore, the integration of sensors and data analytics allows HVAC systems to respond to changing ambient conditions and user preferences in real-time, improving overall efficiency and passenger comfort.
• Adoption of Eco-Friendly Refrigerants: The automotive industry is transitioning to the utilization of environmentally benign refrigerants, namely CO2 (R744), to reduce its influence on the environment. This transformation is being driven by strict restrictions aimed at lowering harmful emissions and increasing fuel efficiency. Adoption of these sustainable refrigerants not only benefits the environment but also provides an opportunity for manufacturers focused on producing novel HVAC solutions that meet environmental standards.

Global Automotive HVAC System Market Regional Analysis

Here is a more detailed regional analysis of the automotive HVAC system market:

Asia Pacific:

• According to Market Research, the Asia Pacific region is estimated to dominate the automotive HVAC system market over the forecast period. The Asia Pacific region, particularly China and India, is witnessing rapid expansion in car production and sales, resulting in increased demand for HVAC systems. According to the China Association of Automobile Manufacturers (CAAM), China produced 27.02 million automobiles in 2021, up 3.4% from 2020. Similarly, the Society of Indian Automobile Manufacturers (SIAM) estimated that India’s total vehicle production reached 22.93 million units in the fiscal year 2021-2022, up 1.2% over the previous year. This increase in car manufacturing is directly related to the rising demand for automotive HVAC systems in the region.
• Furthermore, increased disposable affluence in many Asia Pacific countries is boosting demand for vehicles with improved comfort amenities, such as sophisticated HVAC systems. According to the Asian Development Bank, developing Asia’s per capita GDP grew at an average annual rate of 5.3% between 2000 and 2018. This economic prosperity has resulted in higher consumer expectations for automotive comfort. According to a J.D. Power survey, 84% of new car purchasers in India believe air conditioning to be the most significant feature, demonstrating the importance of HVAC systems in the region’s automotive industry.

North America:

• North America is estimated to exhibit substantial growth within the market during the forecast period. Luxury and premium vehicles in North America are becoming increasingly popular, with modern HVAC systems as standard. According to the National Automobile Dealers Association (NADA), luxury vehicle sales in the United States climbed 13.2% in 2021 over 2020, accounting for 14.3% of total vehicle sales. This trend is increasing demand for complex HVAC systems with features such as multi-zone climate control and air purification, hence boosting the regional automotive HVAC system market.
• Furthermore, North America has a wide range of weather conditions, many of which are extreme, making adequate HVAC systems in automobiles increasingly important. According to the National Oceanic and Atmospheric Administration (NOAA), the contiguous United States has warmed by 2.6°F (1.4°C) since 1970, with eight of the top ten warmest years on record occurring since 1998. Rising temperatures, along with increasingly frequent extreme weather events, are driving demand for more powerful and efficient automobile HVAC systems that can sustain comfort in a variety of settings.

Europe:

• Europe region is estimated to exhibit significant growth within the market during the forecast period. Europe’s stringent pollution rules are driving innovation in automobile HVAC systems, particularly for electric vehicles. According to the European Environment Agency (EEA), average CO2 emissions from new passenger cars in the EU fell by 12% between 2019 and 2020, to 107.8 g CO2/km. This trend is encouraging automakers to design more efficient HVAC systems that reduce energy consumption and emissions, hence driving market expansion in the region.
• Furthermore, the rising use of electric vehicles in Europe is a key driver for more effective automotive HVAC systems. According to the European Automobile Manufacturers Association (ACEA), electric vehicle registrations in the EU climbed by 63.1% in 2022, accounting for 12.1% of the market. This transition to EVs needs innovative HVAC systems to enhance energy efficiency and range, fueling the vehicle HVAC system market in Europe.

Global Automotive HVAC System Market: Segmentation Analysis

The Automotive HVAC System Market is segmented based on Component, Technology, Vehicle Type, and Geography.

Automotive HVAC System Market, By Component

• Evaporator
• Compressor
• Condenser
• Receiver-Drier
• Expansion Valve
• Others

Based on Component, the market is segmented into Evaporator, Compressor, Condenser, Receiver-Drier, Expansion Valve, and Others. The compressor segment is estimated to dominate the automotive HVAC system market due to the compressor’s crucial position in the HVAC system, which compresses refrigerant gas and circulates it throughout the system, allowing for efficient heating and cooling. The increasing demand for energy-efficient and fuel-saving compressors has accelerated the segment’s expansion, with manufacturers focusing on producing innovative, low-power models to fulfill consumer demands.

Automotive HVAC System Market, By Technology

• Automatic
• Manual

Based on Technology, the market is segmented into Automatic and Manual. The automatic segment is estimated to dominate the automotive HVAC system market during the forecast period due to consumers’ rising preference for convenience and enhanced comfort amenities in vehicles. Automatic HVAC systems use modern sensors to regulate temperature and air quality without requiring manual adjustments, greatly increasing the passenger experience. As a result, these technologies are progressively being implemented into mid and high-end automobiles, consolidating their market leadership.

Automotive HVAC System Market, By Vehicle Type

• Passenger Car
• Commercial Vehicle
• Electric Vehicle

Based on Vehicle Type, the market is segmented into Passenger Car, Commercial Vehicle, and Electric Vehicle. The passenger car segment is estimated to dominate the automotive HVAC system market owing to the rising demand for passenger comfort and convenience. As consumers place a higher value on climate control features in their vehicles, manufacturers are working on incorporating innovative HVAC systems into a variety of passenger car models, including sedans, hatchbacks, and SUVs.

Automotive HVAC System Market, By Geography

• North America
• Europe
• Asia Pacific
• Rest of the World

Based on Geography, the Automotive HVAC System Market is classified into North America, Europe, Asia Pacific, and the Rest of the World. According to the analyst, the Asia Pacific region is estimated to dominate during the forecasted period. This dominance is fueled by factors such as a large population, fast urbanization, and rising disposable incomes, all of which increase demand for automobiles, both passenger and commercial. Furthermore, significant car production centers in China, Japan, and India add to the increasing need for efficient HVAC systems, particularly in areas with adverse weather conditions.

Key Players

The “Automotive HVAC System Market” study report will provide valuable insight with an emphasis on the global market. The major players in the market are Denso Corporation, Delphi Automotive, Mahle GmbH, Valeo Group, Hanon Systems, Mitsubishi Heavy Industries, Sanden, Calsonic Kansei Corporation, Keihin Corporation, and Transair Manufacturing.

Our market analysis also entails a section solely dedicated to such major players wherein our analysts provide an insight into the financial statements of all the major players, along with product benchmarking and SWOT analysis. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Automotive HVAC System Market Recent Developments

• In July 2023, Marelli introduced a new Thermal Management Module (iTMM) for EVs, which improved HVAC systems by combining the e-powertrain, battery, and cabin thermal circuits into a single component. This development increased vehicle performance, security, and range by up to 20%.
• In May 2023, Hanon Systems announced intentions to invest $40 million in the construction of a new facility in Bulloch County, Georgia. This plant will manufacture HVAC parts for automobiles, assisting Hyundai’s EV production.

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Reasons to Purchase this Report

• Qualitative and quantitative analysis of the market based on segmentation involving both economic as well as non-economic factors• Provision of market value (USD Billion) data for each segment and sub-segment• Indicates the region and segment that is expected to witness the fastest growth as well as to dominate the market• Analysis by geography highlighting the consumption of the product/service in the region as well as indicating the factors that are affecting the market within each region• Competitive landscape which incorporates the market ranking of the major players, along with new service/product launches, partnerships, business expansions, and acquisitions in the past five years of companies profiled• Extensive company profiles comprising of company overview, company insights, product benchmarking, and SWOT analysis for the major market players• The current as well as the future market outlook of the industry with respect to recent developments which involve growth opportunities and drivers as well as challenges and restraints of both emerging as well as developed regions• Includes in-depth analysis of the market of various perspectives through Porter’s five forces analysis• Provides insight into the market through Value Chain• Market dynamics scenario, along with growth opportunities of the market in the years to come• 6-month post-sales analyst support

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