HVAC Systems Market Revenue Growth Supported by Retrofit Projects

The global HVAC systems market was valued at USD 258.96 billion in 2025 and is expected to reach USD 445.73 billion by 2033, registering a compound annual growth rate (CAGR) of 7.0% from 2026 to 2033. The growth of the HVAC systems industry is being driven by increasing construction activities, rapid urbanization, and a growing demand for thermal comfort across residential, commercial, and industrial sectors.

Key Market Trends & Insights:

• Asia Pacific held the largest revenue share of 47.0% in 2025, dominating the global HVAC systems market.
• The Indian HVAC market is projected to grow at a rapid CAGR of 8.3% from 2026 to 2033.
• By equipment type, the heating equipment segment is anticipated to grow at a CAGR of 7.0% in terms of revenue from 2026 to 2033.
• By application, the commercial sector is expected to expand at a CAGR of 7.5% during the forecast period.
• Online distribution channels are projected to grow at a CAGR of 7.7% in revenue between 2026 and 2033.
• Increasing adoption of energy-efficient and smart HVAC systems is a major trend driving technological innovation and market expansion.
• Integration of AI, IoT, and renewable energy solutions is accelerating system upgrades and new installations globally.

Market Size & Forecast:

• 2025 Market Size: USD 258.96 billion
• 2033 Projected Market Size: USD 445.73 billion
• CAGR (2026–2033): 7.0%
• Asia Pacific: Largest market in 2025, accounting for nearly half of global revenue

Energy efficiency regulations and government incentives promoting smart and sustainable HVAC solutions are further boosting market demand. Advances in technology, including IoT-enabled monitoring, AI-driven optimization, and integration with renewable energy sources, are encouraging both system upgrades and new installations. Government initiatives such as rebates, incentive programs, and the adoption of clean heating and cooling equipment in North America and Europe are expected to positively influence market growth. Additionally, concerns related to climate change and the rising awareness of indoor air quality are driving investments in advanced air filtration and ventilation systems.

The global HVAC systems market is moderately to highly fragmented, featuring a mix of multinational corporations, regional original equipment manufacturers (OEMs), and specialized system integrators. Prominent players such as Daikin, Johnson Controls, Trane Technologies, and Carrier dominate sectors requiring strict performance and air quality control, including healthcare applications. Regional companies remain critical for residential and mid-tier commercial projects. Competition is strong across product categories such as chillers, rooftop units, air handling units, and VRF systems, with differentiation increasingly based on energy efficiency, automation, and advanced control technologies.

Order a free sample PDF of the HVAC Systems Market Intelligence Study, published by Grand View Research.

Market dynamics are shaped by the growing emphasis on sustainable, low-emission HVAC solutions, driven by climate change mitigation efforts and net-zero commitments. Innovation is concentrated around inverter-driven compressors, heat pumps, demand-controlled ventilation, and AI-integrated building automation systems. Compliance with energy efficiency standards such as ASHRAE 90.1, EN 378, and certifications like LEED and BREEAM is becoming mandatory, particularly in developed regions. Manufacturers are under pressure to provide solutions that align with performance, carbon reduction goals, and refrigerant phase-down policies outlined in the Kigali Amendment.

The supply chain for key components, including high-efficiency compressors, electronic expansion valves, advanced filters, and low-GWP refrigerants, is relatively concentrated, giving suppliers significant bargaining power. Volatility in input prices and semiconductor shortages can impact profit margins and lead times. Nevertheless, strong demand in healthcare, residential retrofits, and data center applications offers substantial growth opportunities. Leading players are increasingly investing in modular, scalable, and smart HVAC systems while leveraging IoT and remote diagnostics to provide predictive maintenance and lifecycle optimization.

Some of the key market players include Carrier Corporation and Daikin Industries, Ltd. Carrier provides a wide range of solutions including heat pumps, air conditioners, boilers, furnaces, air purifiers, humidifiers, dehumidifiers, ventilators, air scrubbers, thermostats, UV lamps, energy services, and building controls across retail, commercial, transport, and foodservice sectors. Carrier was acquired by United Technologies Corporation in 1979 and became a standalone business again in April 2020. Daikin Industries, Ltd. offers air-conditioning systems, room heating and heat pump hot water supply systems, packaged air-conditioning systems, and solutions for industrial facilities, offices, and plants.

Key HVAC Systems Companies:

• Carrier Corporation
• Daikin Industries Ltd.
• Fujitsu
• Haier Group
• Panasonic Corporation
• AAON
• Johnson Controls
• LG Electronics
• Lennox International Inc.
• Mitsubishi Electric Corporation
• Rheem Manufacturing Company
• Samsung
• Trane
• Midea
• Danfoss AS
• Munters
• Frigidaire HVAC
• Bosch Group
• STULZ Air Technology Systems, Inc.
• Honeywell International Inc.

In conclusion, the HVAC systems market is poised for robust growth over the forecast period, fueled by technological innovation, regulatory support, and increasing awareness of energy efficiency and indoor air quality. The market presents significant opportunities in both developed and emerging regions, with Asia Pacific leading in revenue share and India showing the highest projected growth. Ongoing developments in AI, IoT, and sustainable solutions will continue to drive competitive differentiation, while the growing demand for commercial, residential, and industrial applications ensures a broad and resilient market outlook.