Room AC Market Size and Growth 2031

The room AC market size is expected to reach US$ 78.60 billion by 2031 from US$ 52.16 billion in 2024. The market is anticipated to register a CAGR of 6.1% during 2025–2031. Accelerated manufacturing expansion is likely to bring new trends to the market in the coming years.

Room AC Market Analysis

Modern room air conditioners often include adjustable thermostats, timers, energy-saving modes, air filters for improved air quality, and remote controls for convenience. Room air conditioners are an effective, affordable, and widely used solution to improve indoor comfort by maintaining a cool and pleasant environment during hot or humid conditions.

Growing population, increasing urbanization, and rising global temperatures are driving the room AC market growth. Moreover, the adoption of eco-friendly refrigerants and technological advancements is expected to propel the market growth during the forecast period. The expansion of manufacturing capacity is emerging as a key trend in the room AC market. However, increasing prices of raw materials and growing supply chain issues are expected to hamper the market growth in the coming yearss.

Room AC Market Overview

A room air conditioner (RAC) is a compact, self-contained cooling device designed to regulate the temperature, humidity, and air quality within a single room or small enclosed space. It provides comfort in hot weather by removing heat and moisture by expelling the indoor air. It typically consists of key components such as a compressor, condenser coil, evaporator coil, expansion valve, and a fan system housed within a single unit that can be installed in a window, through a wall, or as a portable device. The RAC operates on the principle of the refrigeration cycle, where the refrigerant absorbs heat from the room air as it evaporates in the evaporator coil and releases it via the condenser coil after being compressed. This process cools the indoor air, which is circulated back into the room by a blower. Additionally, excess moisture condenses on the evaporator coil and drains away, dehumidifying the space.

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Room AC Market: Strategic Insights

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Room AC Market Drivers and Opportunities

Rising Global Temperatures

The demand for effective indoor cooling solutions has surged with the rising temperatures, particularly in densely populated urban areas and regions vulnerable to extreme heat. Prolonged heat waves, increasingly frequent and intense due to climate change, are amplifying consumer reliance on air conditioning as a necessity rather than a luxury. Rising temperatures are catalyzing residential and commercial demand for affordable, energy-efficient cooling systems, particularly in Asia Pacific, Middle East, and parts of Africa and Latin America.

According to NASA’s Goddard Institute for Space Studies (GISS), the year 2024 marked the warmest global surface temperature since reliable recordkeeping began in 1880. This assessment is supported by independent analyses from the National Oceanic and Atmospheric Administration (NOAA) and other international climate research organizations. The data reveal that Earth's average temperature in 2024 was ~2.65°F (1.47°C) higher than the preindustrial baseline (during 1850–1900). Notably, the last decade comprises the ten warmest years ever recorded, illustrating a clear and accelerating trend of global warming.

This climate-induced demand is compelling manufacturers and policymakers to accelerate innovations in RAC technology, including smart air conditioning systems, inverter-based units, and eco-friendly refrigerants. These developments are not only improving energy efficiency and reducing environmental impact but are also opening new market segments. In this context, the ongoing record-breaking global temperatures are both a warning signal and a catalyst, prompting immediate consumer response and long-term structural shifts that are reshaping the global room AC market landscape. Thus, the climatic urgency and evolving consumer expectations for comfort and safety in increasingly harsh environments fuel the room AC market growth.

Increasing Adoption of Eco-Friendly Refrigerants

Refrigerants are central to the functioning of indoor climate control systems, enabling the transfer of heat that allows air conditioners to cool or heat indoor spaces. Historically, widely used refrigerants such as R-410A and R-22 have been effective in thermal management but carry a high global warming potential (GWP), contributing significantly to environmental degradation. In response to growing environmental concerns and evolving regulatory standards, the transition to next-generation refrigerants such as R-32 presents a major growth opportunity for the room AC market. R-32 is a low-GWP refrigerant that offers superior thermodynamic performance and energy efficiency. With ~10% higher thermal capacity than R-410A, R-32 enables air conditioning systems to operate more efficiently, reducing both energy consumption and greenhouse gas emissions. The integration of R-32 into new air conditioning systems aligns with India’s commitment to sustainability and global climate goals and also stimulates demand for redesigned and upgraded AC components. Components such as compressors, heat exchangers, and expansion valves must be optimized to handle R-32’s unique properties, creating opportunities for innovation and product development within the domestic manufacturing ecosystem. The transition to R-32 could result in a 19% reduction in CO₂-equivalent emissions over 10 years if it replaces high-GWP refrigerants across all installed AC units.

R-32 has zero ozone depletion potential, similar to R-410A, making it an environmentally responsible alternative that also supports long-term regulatory compliance. As the world accelerates its shift toward energy-efficient, inverter-based AC systems, the use of R-32 becomes increasingly critical. The adoption of R-32 refrigerant represents a transformative opportunity for the room AC market. Moreover, according to Haier India, the adoption of R-32 refrigerant marks a pivotal shift toward more environmentally responsible and energy-efficient air conditioning solutions. As a low-GWP refrigerant, R-32 enables the development of cost-effective and high-performance AC units, particularly suited for heat-intensive regions. This transition supports sustainable indoor comfort and drives the demand for advanced compressors, heat exchangers, and system components designed to optimize the performance and compatibility of R-32-based systems. Therefore, the adoption of eco-friendly refrigerants, such as R-32, is expected to present lucrative opportunities to the room AC market in the coming years.

Room AC Market Report Segmentation Analysis

Key segments that contributed to the derivation of the room AC market analysis are product type, technology, and end-user.

• Based on product type, the market is segmented into split AC, window AC, and portable AC. The split AC segment dominated the market in 2024.
• Based on the installation type, the market is bifurcated into inverter technology and non-inverter technology. The inverter technology segment accounts for a larger share of the market in 2024.
• In terms of end user, the market is bifurcated into residential and commercial. The residential segment register a higher CAGR in 2024.

Room AC Market Share Analysis by Geography

The room AC market is segmented into five major regions: North America, Europe, Asia Pacific, Middle East & Africa (MEA), and South America. Asia Pacific dominated the market in 2024.

On March 29, 2024, TECO's Air and Intelligent Life business group held its "2024 Asia-Pacific Joint New Product Launch Event," spanning key regional markets including Taiwan, Mainland China, Vietnam, and Indonesia. In response to rising electricity prices and growing energy efficiency demands, TECO unveiled a new lineup of smart, energy-saving air conditioners and refrigeration systems designed for both residential and commercial applications. These products meet or exceed Level 1 Energy Efficiency Grading Labeling (EEL) standards, aligning with evolving regulatory requirements and enabling customers to easily qualify for energy-saving subsidies.

Chairman Sophia Chiu emphasized that air conditioning and refrigeration account for a significant share of urban electricity consumption. In light of this, TECO is committed to delivering high-performance solutions across a wide temperature range (from −55°C to 120°C), including advanced refrigeration, air conditioning, and heat pump technologies. By supporting government-led low-carbon and smart energy initiatives, the company offers highly efficient products and provides integrated, one-stop consulting services to help clients navigate and benefit from subsidy programs.

Room AC Market Regional Insights

The regional trends and factors influencing the Room AC Market throughout the forecast period have been thoroughly explained by the analysts at The Insight Partners. This section also discusses Room AC Market segments and geography across North America, Europe, Asia Pacific, Middle East and Africa, and South and Central America.

Room AC Market Report Scope

Room AC Market Players Density: Understanding Its Impact on Business Dynamics

The Room AC Market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Market players density refers to the distribution of firms or companies operating within a particular market or industry. It indicates how many competitors (market players) are present in a given market space relative to its size or total market value.

Major Companies operating in the Room AC Market are:

1. Panasonic Holdings Corp
2. Voltas Ltd
3. Carrier Global Corp
4. LG Electronics Inc
5. Blue Star Ltd
6. Daikin Industries Ltd

Disclaimer: The companies listed above are not ranked in any particular order.

Room AC Market News and Recent Developments

The Room AC Market is evaluated by gathering qualitative and quantitative data post primary and secondary research, which includes important corporate publications, association data, and databases. A few of the developments in the Room AC Market are listed below:

• Voltas Limited, from the house of Tatas, has launched new and exclusive brand stores in Faridabad. Voltas, which holds the top position in the Indian AC market, is also a prominent brand in Haryana and Delhi NCR. With this new addition, Voltas now boasts a total of 20 brand stores in Haryana and 38 across Delhi and the Haryana belt.

(Source: Voltas Limited, Press Release, March 2025)

• Samsung Electronics Co., Ltd. announced a partnership with game developers Nexon Korea and Neople to deliver unparalleled 3D experiences in the upcoming game ‘The First Berserker: Khazan.’ The game’s 3D elements are being specially customized and designed during development, utilizing Samsung technology and the advanced capabilities of the Odyssey 3D monitor to create an immersive 3D gaming experience without the need for 3D glasses.

(Source: Samsung Electronics Co., Ltd, Press Release, January 2025)

Room AC Market Report Coverage and Deliverables

The "Room AC Market Size and Forecast (2021–2031)" provides a detailed analysis of the market covering the areas mentioned below:

• Room AC market size and forecast at regional and country levels for all the key market segments covered under the scope
• Room AC market trends as well as market dynamics such as drivers, restraints, and key opportunities
• Detailed PEST and SWOT analysis
• Room AC market analysis covering key market trends, regional framework, major players, regulations, and recent market developments
• Industry landscape and competition analysis covering market concentration, heat map analysis, prominent players, and recent developments for the room AC market
• Detailed company profiles