Vietnam HVAC Market Outlook to 2028

Vietnam HVAC Market Overview

• The Vietnam HVAC market was valued at USD 800 million in 2023. This growth is primarily driven by the country's economic development, increased disposable income, and the government's focus on infrastructure development, which has led to the construction of new residential, commercial, and industrial buildings.
• The key players in the Vietnam HVAC market include Daikin Industries, Ltd., Johnson Controls International plc, LG Electronics Inc., Samsung Electronics Co., Ltd., and Mitsubishi Electric Corporation. These companies have established strong market positions through continuous innovation, extensive distribution networks, and a focus on energy-efficient solutions.
• In 2024, Daikin Industries inaugurated a new manufacturing facility in Hung Yen Province with an investment of VND 1.6 trillion. The facility has an annual production capacity of 500,000 units, catering to both domestic and international markets. This expansion aims to meet the growing demand for HVAC systems in Vietnam and strengthen Daikin's market presence.
• In 2023, Ho Chi Minh City dominates the Vietnam HVAC market due to its rapid urbanization, robust construction activities, and high population density. The ongoing development of residential and commercial projects, coupled with the city's focus on modern infrastructure, drives the demand for HVAC systems in this region.

Vietnam HVAC Market Segmentation

Vietnam's HVAC market is segmented into product type, application, and region.

• By Product Type: The Vietnam HVAC market is segmented by product type into air conditioners, heating systems, and ventilation systems. In 2023, air conditioners dominated the market under the product type segmentation. This dominance is attributed to the tropical climate of Vietnam, leading to a high demand for cooling solutions.

• By Application: The Vietnam HVAC market is segmented by application into residential, commercial, and industrial. In 2023, the residential segment dominated the market. The growth of the middle-class population and the increasing number of housing projects contribute to the high demand for HVAC systems in residential applications.

• By Region: The market is segmented by region into North, South, East, and West. In 2023, the North region dominated the market due to the presence of major cities such as Hanoi and Hai Phong, along with some major industrial activities, drives the demand for HVAC systems in the North region. The cooler climate also contributes to the higher demand for heating systems in this region.

Vietnam HVAC Market Competitive Landscape

• LG Electronics: In 2024, LG Electronics launched a new range of smart HVAC systems designed to integrate with home automation systems. These systems allow users to control their HVAC units remotely via mobile applications, enhancing convenience and energy efficiency. The introduction of this product line reflects LG's commitment to innovation and smart technology solutions.
• Johnson Controls: Johnson Controls established its Vietnam office and Industrial Refrigeration local service team in 2021, aiming to create around 80 local jobs. This initiative aligns with Vietnam's goal of reducing building energy consumption by 10% by 2025 through energy-efficient solutions tailored to Vietnamese consumers and businesses.

Vietnam HVAC Market Analysis

Vietnam HVAC Market Growth Drivers:

• Urbanization: Urbanization is accelerating in Vietnam, with the urban population projected to rise from 37.5% in 2020 to 45% by 2035. This demographic shift increases the demand for HVAC systems in residential and commercial buildings, as urban areas face higher temperatures and humidity, necessitating effective climate control solutions.
• Technological Advancements: Technological advancements are reshaping the HVAC landscape in Vietnam, with over 60% of consumers expressing a willingness to invest in smart home technologies. The growing interest in IoT-enabled and energy-efficient HVAC systems reflects a trend towards enhanced user convenience and sustainability, driving innovation and market growth.
• Climate Change and Rising Temperatures: Rising temperatures in Vietnam, with an average increase of about 0.5C per decade, are driving demand for air conditioning. As climate change exacerbates heat conditions, both households and businesses increasingly rely on HVAC systems to maintain comfortable indoor environments, significantly boosting market growth.

Vietnam HVAC Market Challenges:

• High Initial Costs: The initial cost of energy-efficient HVAC systems remains a barrier for many consumers and businesses. In 2024, the average cost of an advanced HVAC system was VND 30 million. Despite the long-term savings and environmental benefits, the high upfront investment required for these systems can deter potential buyers, particularly in the residential and small business sectors.
• Energy Consumption: HVAC systems are major consumers of electricity, contributing to substantial energy costs. In 2024, Vietnam's total electricity consumption was 240 billion kWh, with a major portion attributed to HVAC systems. The high energy consumption of HVAC systems raises concerns about energy efficiency and operational costs, posing a challenge for both manufacturers and users in the market.

Vietnam HVAC Market Government Initiatives:

• Green Building Standards: In 2024, the Ministry of Construction mandated the use of energy-efficient HVAC systems in new buildings to achieve certification under the Green Building Program. This initiative aims to reduce energy consumption and environmental impact, driving the demand for efficient HVAC solutions in both residential and commercial constructions.
• Renewable Energy Integration: The Vietnamese government is promoting the integration of renewable energy with HVAC systems to reduce reliance on conventional energy sources. In 2024, an investment of VND 10 trillion was made in projects that combine solar energy with HVAC systems. This initiative provides incentives for businesses and households to adopt hybrid solutions, enhancing energy efficiency and reducing operational costs.

Vietnam HVAC Future Market Outlook

Vietnam's HVAC market is expected to grow in the coming years. The market is also likely to shift towards more organized with established players and online platforms expanding their reach.

Vietnam HVAC Future Market Trends:

• Increased Adoption of Smart HVAC Systems: Over the next five years, the Vietnam HVAC market will witness a shift towards smart HVAC systems. These systems, equipped with advanced sensors and IoT technology, will enable users to control and monitor their HVAC units remotely. The integration of smart technology is expected to enhance energy efficiency and user convenience, driving market growth.
• Development of Energy-Efficient Technologies: The focus on energy efficiency will lead to the development of new HVAC technologies that minimize energy consumption. By 2028, manufacturers will invest in research and development to create products that meet stringent energy efficiency standards. Innovations such as variable refrigerant flow (VRF) systems and advanced heat exchangers will become more prevalent, supporting sustainable market growth.