Posted On: 2020-08-12
Saudi Arabia air conditioner market was dominated by a centralized air conditioner in revenue terms in 2019 – 6Wresearch.
Around 70% of Saudi Arabia’s electricity is used for air conditioning, owing to high cooling requirements in the hot desert climate of the country. The air conditioner market in Saudi Arabia registered a drop in market revenues, on account of the slump in oil prices and the slowdown of economic growth, during 2016-2019. However, government initiatives to diversify the economy away from oil, led by Saudi Vision 2030, are anticipated to draw in substantial public and private investments for infrastructural developments in the country, thereby bolstering demand for air conditioners during the forecast period.
According to 6Wresearch, Saudi Arabia air conditioner market size is projected to grow at a CAGR of 1.5% during 2020-26. Growing investments in the non-oil sectors, combined with government programs to provide affordable housing and opening up of the tourism sector beyond medical and religious tourism is anticipated to drive the market for air conditioners during the forecast period. For instance, infrastructure giga-projects including Neom, Red Sea Project, Qiddiya Project, and Amaala Project are expected to drive the market demand for air conditioners over the coming years, on account of the creation of new avenues for product deployment. However, in 2020, the oil price crash, together with ban of international pilgrims to Hajj to contain the spread of coronavirus, as well as supply chain disruptions are anticipated to restrict the growth of the air conditioner market in the country, followed by a recovery driven by opening up of commercial, retail and hospitality sectors from 2021.
According to Akshay Thakur, Senior Research Analyst, Research and Consulting, 6Wresearch, “Centralized air conditioners hold the major share in the overall air conditioner market in Saudi Arabia in terms of revenue and are projected to maintain their position over the coming years on account of growing popularity of components such as VRFs in the commercial sector, and owing to increasing consumer preferences for energy-efficient systems. Further, increasing investments in the housing sector, streamlined by programs such as the Sakai initiative launched in 2017, seek to provide affordable housing to people in different regions of Saudi Arabia, thereby driving the residential demand for room air conditioners over the coming years. Moreover, an increasing number of pilgrims to the country for Hajj and Umrah are expected to augment the demand for floor-standing air conditioners, which are extensively used in temporary living arrangements for pilgrims such as the tent-city of Mina.”
“The hospitality and commercial & retail segments are projected to witness the highest growth in demand for air conditioners on the back of the development of several infrastructural projects such as King Abdullah Economic City and Jazan Economic City. Additionally, growing demand for new hotels, especially, medium budget hotels over the coming years, driven by the government measures to ease tourist visa restrictions by expediting the issue of e-visas and visas on arrival for tourists from 49 countries, would propel the demand for air conditioners in the country’s hospitality sector during the forecast period. The suspension of e-visas, to limit the spread of coronavirus, would hinder the demand for air conditioners arising from the hospitality sector in 2020. However, the resumption of issuance of visas after the crisis is effectively dealt with would augment the demand for air conditioners in the country”, Akshay further added.
According to Sanya Sethi, Research Associate, Research and Consulting, 6Wresearch, “The central region of the country is currently the leading contributor to the overall air conditioner market in Saudi Arabia, owing to the infrastructural developments and relatively high disposable income of people in the Riyadh province of the region. Moreover, the western region is expected to register significant growth over the coming years, on account of hospitality projects such as the Red Sea project on the west coast of the country, as well as growing religious tourism to Mecca and Medina in the western region.”
“Saudi Arabia Air Conditioner Market (2020-2026)" provides an in-depth analysis with 45 figures, covered in 97 pages. The report estimates and forecasts overall Saudi Arabia air conditioner market by types, by applications and by regions. The report provides an unbiased and detailed analysis of the on-going trends, opportunities/high growth areas, and market drivers which would help the stakeholders to devise and align their market strategies according to the current and future market dynamics.