HVAC Maintenance Services

HVAC Maintenance Services Global Market Outlook:

• The global market for 2021 is estimated to be $64.9 billion, growing at a CAGR of 4.75-5.25 percent between 2022 and 2025

• The market is expected to grow to $67.8 billion by 2022

• Emerging regions including the US, the US market is highly matured, in terms of buyer as well as supplier maturity. There are multiple large global suppliers, who have a direct supply and support capability in the US

• Industry has a high retention rate (Tier-1 players have an average client retentions rate of about 98 percent)

Global HVAC Market Overview

Key Trends Applicable

• Intelligent HVAC Systems Using IoT and Data Analytics

• Smart HVAC Designs

• Green HVAC Units

Growth drivers for HVAC Maintenance Services

• The construction market and its rate of growth has a direct impact on the sales of HVAC equipment and thus contributes directly to the market revenues through installation in both residential as well as commercial buildings

• The demand for HVAC services, however, is majorly dictated by the demand from commercial spaces like Office, Healthcare and Public buildings, manufacturing and retail spaces

• Government tax saving incentives and schemes, which allow an exemption of $1.80 per Sq.Ft for those buildings achieving savings of 50 percent or above by usage if efficient HVAC systems has also been a major reason for refurbishment and regular maintenance contracts in the HVAC space

• Technology advances and new product offerings that guarantee cost savings through efficient energy have also aided in increasing the adoption rate for HVAC services

Porter's Analysis on HVAC Maintenance Services

Supplier Power

• The AHU units can be very diverse and based on the buyers' demographics and requirements on-site

• For Maintenance & Repair services, buyers normally go for preferred service providers either OEMs or authorized vendors

• Availability of contracted skilled labour for industrial services are less than sufficient and the labour rates are also very high in developed regions

• The risk in terms of availability of labour is borne by the suppliers

Barriers to New Entrants

• HVAC related equipment and AHU in general are highly specialized equipment

• High investment costs are a major deterrent for new players entering into the market

• Suppliers need to have a full fledged infrastructure in place to not just deliver the AHU’s but also provide apt after sales support in terms of maintenance, service and retrofitting/upgradation of system continuously to keep them performing at the best even beyond their life time

Intensity of Rivalry

• Highly competitive market as relationships are usually stretched over long periods of time

• Supply base is majorly driven by local and regional suppliers. The industry has been witnessing regular M&A trend, which has helped the suppliers in increasing cross domain services and regional capabilities

Threat of Substitutes

• Technology is changing very rapidly and the solutions for HVAC are changing rapidly

• As energy and environmental regulations keep getting stringent the suppliers are focusing on improving their offerings and bringing in innovations to remain competitive

Buyer Power

• Buyers do not have the volumes to have significant power in negotiations

• AHU’s vary based on the specific requirements of the buyers and the functions

• Backward integration or upgrading of existing system with new ones is a huge task especially when shifting across brands