Overview of the Russian HVAC market in 2013

In 2013 the Russian RAC market shows negative growth again. In 2012 the volume of the sales of the split-systems to the end user was about 2.1 million sets. In 2013 it decreases to 1.9 million sets. In 2014 further sales decline is expected.

The cause of this is high saturation of the market. It confirmed by three facts.

  1. The summer of the 2013 was hot enough, but there was no sharp peak of the sales in the hottest days. The explanation of this is the most of people who can buy air-conditioner already done it.
  2. Private customers demand has dramatically shifted to the low-cost segment in the last two years. In 2013, about 70% of the total sales accounted for Chinese brands and OEM-brands made by Chinese factories. It means that Russian rich and middle classes have air-conditioners in their houses already. Today, most of the buyers of the air-conditioners are the people with relatively low incomes.
  3. The segment of the commercial split-systems (>5kW) was formed in 2007 and since it demonstrates stability. Segment of home split-systems follows the same path with 6-7 years delay.

At present, the Russian RAC/PAC fleet has formed by about 80% and accounted about 12.5 million units. Meanwhile, only 22 million of 142 million Russians live in a climate where air conditioning is needed. Given the average life of the air conditioner about 8-9 years, it is easy to calculate that the volume of sales in the final stabilization of the market will be 1.75-1.95 million conditioners.

Further increase of the sales is possible only if real incomes will grow significantly. Therefore, the forecast for the near future is moderately pessimistic.

And don’t you forget about the big volume of unsold splits. Now it is about 1.1 million sets. Most of these splits were made in China and Korea. In 2014, we can expect a reduction of the import to the 1.25-1.3 million sets. Supplies from China and Korea will be reduced most.

Let’s see the Russian market of the industrial AC’s. In 2013, sales of the VRF increased by 8%. Sales of the chillers and AHU were on the 2012 level. Meanwhile, the growth of the sales of the fancoils is 20-25%! It is very disturbing sign. It is a clear signal of the forthcoming market stagnation. The reduction of expenditures for construction in national and local budgets says the same thing. In 2014 we can expect downfall of the Central Plant and VRF markets by 8-10%. In 2015 this downfall may be deeper.

In this article were used the materials of APIC and the company LITVINCHUK MARKETING.