Market Trends of Japan HVAC Industry
HVAC Equipment Holds Significant Market Share
- The increasing need for better indoor and outdoor air quality is a major factor fueling the expansion of HVAC equipment in Japan. Growing recognition of the crucial role of air quality encourages homeowners and business owners to purchase HVAC systems that can effectively filter and purify indoor air and minimize outdoor emissions.
- Ventilation systems, such as air handling units (AHUs), are frequently utilized in spacious establishments that numerous individuals, such as shopping centers, frequently access. These establishments are required to adhere to strict regulations concerning air quality and CO2 levels. By introducing outside air into the rooms, air handling units can effectively decrease the necessity for multiple blower fans typically used in large facilities.
- Heat pumps are essential HVAC equipment that moves heat from a colder area to a hotter area through a refrigeration cycle. This results in cooling the colder area and warming the hotter area. During colder temperatures, a heat pump is able to draw heat from the external environment to warm a home, whereas during hotter temperatures, it can expel heat from the house to the outdoors. Heat pumps are considered more energy-efficient than alternative heating or cooling systems for residential use, considering the capability of heat pumps to transfer heat rather than produce it.
- The Japan Member Country Report also focused on the advancement of heat pumps in Japan, highlighting the latest legislation targeting 2050 net zero. The government is actively promoting the use of heat pumps by setting specific targets for industrial HPs (IHP) and commercial and household heat pump water heaters (HPWH) as crucial technologies for decarbonization.
- Although the air conditioners (AC) market will witness growth in residential room ACs, there is a pressing need for accelerated deployment of industrial HPs and HPWHs to effectively achieve the outlined goals. Thus, the growing construction activities in the country will propel the adoption of HVAC equipment. According to MLIT (Japan), in 2023, Japan initiated approximately 9,580 office construction projects, the total floor area of which remained consistent with the previous year.
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Residential Segment Holds Significant Market Share
- The rise in rural populations moving to urban centers has resulted in a surge in the development of residential structures. Consequently, there has been a direct impact on the need for HVAC equipment, as these buildings necessitate effective cooling and air quality management systems to cater to the expanding urban populace.
- According to MLIT Japan, in 2023, approximately 819.6 thousand housing units were initiated in Japan. Residential construction investment by the private sector was forecasted to increase to JPY 17.4 trillion in fiscal year 2023. Similarly, in Japan, construction began on approximately 366.8 thousand detached houses in 2023.
- The demand for air conditioning and ventilation systems in Japan's residential sector is increasing. AC and ventilation systems play a crucial role in preserving indoor air quality using filtration and ventilation. The rising levels of air pollution and the spread of viruses drive the need for more advanced HVAC systems to deliver improved air quality.
- Regular maintenance and repairs of the HVAC equipment in the residential industry guarantee peak performance of HVAC systems, thus increasing demand for HVAC services in the country. One key benefit of routine HVAC upkeep and repairs is the capacity to enhance the system's effectiveness. In the absence of proper maintenance, the system could encounter operational challenges, leading to heightened energy usage and greater expenses over time. With the growing demand for efficient practices in the residential sector, the requirement for HVAC services will also grow.
- The players in the country are focusing on expanding their presence to capture a significant market share, further supporting the market growth. For instance, in August 2023, Daikin Industries Ltd announced that it would purchase land in Tsukubamirai City, Ibaraki Prefecture, Japan, to create a new manufacturing facility for air conditioners. This strategic move will enhance the company's local production capabilities and support its goal of expanding its presence in the Japanese market.
