Automotive HVAC Market Report 2025

This Automotive HVAC market report covers market characteristics, size & growth, segmentation, regional & country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market’s historic and forecast market growth by geography.

The automotive HVAC market size has grown strongly in recent years. It will grow from $55.35 billion in 2024 to $59.61 billion in 2025 at a compound annual growth rate (CAGR) of 7.7%. The growth in the historic period can be attributed to global automotive production, global warming concerns, rise in demand for energy efficacy, rise in demand for commercial vehicles.

The automotive HVAC market size is expected to see strong growth in the next few years. It will grow to $81.22 billion in 2029 at a compound annual growth rate (CAGR) of 8%. The growth in the forecast period can be attributed to rising electric and hybrid vehicles, growing autonomous vehicles, emerging markets growth, increasing research and development activities, rising disposable income. Major trends in the forecast period include smart and connected hvac, thermal comfort solutions, cabin sensing and ai, multi-zone hvac, green and eco-friendly hvac.

The rising demand for luxury vehicles is anticipated to drive the growth of the automotive HVAC market in the coming years. A luxury vehicle is characterized by enhanced performance capabilities, opulent interiors, and the latest safety and technology features. In premium luxury vehicles, the automotive HVAC system plays a crucial role in providing a thermally comfortable environment tailored to each passenger's needs. For example, in January 2024, the BMW Group, a Germany-based manufacturing company, reported that it recorded 28,723 registrations of all-electric vehicles in 2023, representing a 34% increase compared to 2022. Consequently, the growing demand for luxury vehicles is fueling the expansion of the automotive HVAC market.

The increasing demand for electric vehicles is anticipated to drive the growth of the automotive HVAC market in the future. Electric vehicles (EVs) are defined as vehicles that operate on electricity stored in rechargeable batteries, replacing or supplementing traditional internal combustion engines. In electric vehicles, automotive HVAC systems are utilized to ensure comfort and climate control for passengers while also maintaining the optimal operating temperature. For instance, in January 2024, a report from Kelley Blue Book, a US-based company under Cox Automotive, indicated that in 2023, a record 1.2 million car buyers in the United States opted for electric vehicles, making up 7.6% of the total U.S. vehicle market, an increase from 5.9% in 2022. Thus, the rapidly growing demand for electric vehicles is driving the expansion of the automotive HVAC market.

Product innovations are a key trend gaining popularity in the automotive HVAC market. Major market players are concentrating their efforts on creating innovative products with advanced technologies such as the introduction of automatic climate control that controls the temperature of the car, using green technologies to develop eco-friendly and energy-efficient automotive HVAC systems, and the adoption of eco-friendly refrigerants, among others. For instance, in October 2021, Honda Motor Company Ltd., a Japan-based automotive manufacturing company, introduced an innovative anti-virus cabin air filter that is highly effective in capturing a wide range of harmful germs, allergens, and even viruses that cause significant health problems. This revolutionary cabin air filter offers active protection by considerably lowering virus aerosol concentrations. A unique multi-layer architecture successfully filters gathers, and suppresses harmful ambient gasses, as well as inorganic and biological particles and aerosols. The Honda antivirus cabin air filter is one of the most effective protections available for reducing hazards while driving.

The automotive Heating, Ventilation, and Air Conditioning (HVAC) market is anticipated to experience substantial growth, driven by the increasing demand for luxury vehicles. Luxury vehicles, characterized by superior performance, lavish interiors, and the latest safety and technology features, rely on advanced automotive HVAC systems to provide a thermally comfortable environment tailored to each passenger's preferences. In April 2022, Lamborghini, an Italy-based luxury sports car and SUV manufacturer, reported a remarkable 142% increase in sales compared to the previous year. Delivering 63 luxury and sport utility vehicles (SUVs) on Indian roads, as opposed to 26 in 2020-21, reflects the growing demand for luxury vehicles and, consequently, the expansion of the automotive HVAC market.

The surge in demand for electric vehicles is also expected to drive the growth of the automotive HVAC market. Electric vehicles (EVs), powered by rechargeable batteries, utilize automotive HVAC systems to provide occupants with comfort and climate control while maintaining optimal operating temperatures. According to the International Council on Clean Transportation, electric vehicle sales reached a record high of 6.9 million in 2021, marking a 107% increase from 2020. Of these vehicles, 98% were light-duty vehicles (LDVs), and 2% were heavy-duty vehicles (HDVs). This significant growth in electric vehicle demand contributes to the overall expansion of the automotive HVAC market.

Product innovations are a significant trend gaining traction in the automotive HVAC market. Key industry players are focusing on developing cutting-edge products that incorporate advanced technologies, such as automatic climate control for regulating vehicle temperature, using green technologies to create eco-friendly and energy-efficient automotive HVAC systems, and adopting environmentally friendly refrigerants, among other initiatives. For example, in July 2024, Modine, a US-based manufacturing firm, introduced the EVantage cabin climate system, an advanced climate control solution tailored specifically for electric vehicles (EVs) to enhance comfort and energy efficiency. This system employs smart sensors and algorithms to monitor and adjust cabin temperature and airflow based on real-time data, including external weather conditions, passenger preferences, and vehicle performance. By effectively managing heating, ventilation, and air conditioning (HVAC) functions, the EVantage system reduces energy consumption, thus extending the vehicle's range while ensuring a comfortable driving experience. Its innovative features, such as pre-conditioning capabilities and personalized climate zones, highlight the evolving standards of sustainability and user-centered design in contemporary electric vehicles.

Automotive HVAC (Heating, Ventilation, and Air Conditioning) systems are essential components in vehicles that control temperature, humidity, and air quality, thereby improving passenger comfort. These systems include heating units, air conditioning units, and ventilation systems, all working together to maintain optimal environmental conditions inside the vehicle cabin.

The main components of automotive HVAC include the evaporator, compressor, condenser, receiver or drier, and expansion device. The evaporator facilitates the evaporation of refrigerant, transforming it from a liquid to a gaseous state. The technologies employed in automotive HVAC systems include both manual and automatic modes. Various types of vehicles benefit from automotive HVAC, including passenger cars, commercial vehicles, light commercial vehicles, and heavy commercial vehicles.

The automotive HVAC market research report is one of a series of new reports that provides automotive HVAC market statistics, including automotive HVAC industry global market size, regional shares, competitors with an automotive HVAC market share, detailed automotive HVAC market segments, market trends and opportunities, and any further data you may need to thrive in the automotive HVAC industry. This automotive HVAC market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenarios of the industry.

Major players in the automotive HVAC market are concentrating on product innovation, such as the Valeo heat pump, to maintain their competitive edge. The Valeo heat pump is an energy-efficient automotive system that harnesses outside air to heat or cool the cabin, thereby reducing the load on the vehicle's battery and enhancing the range of electric vehicles. For example, in May 2023, Raythink, a China-based technology company, introduced a new smart car AR head, which is an innovative augmented reality (AR) system aimed at improving the driving experience by seamlessly merging digital information with the real world. This advanced head-up display (HUD) projects essential driving data, navigation directions, and safety alerts directly onto the windshield, enabling drivers to keep their focus on the road while accessing vital information. By utilizing AR technology, the system offers a more intuitive interface, enhancing situational awareness and minimizing distractions.

In March 2022, Lear, a manufacturing company based in the US, acquired Kongsberg Automotive for an undisclosed sum. This acquisition focuses on Kongsberg Automotive’s Interior Comfort Systems business and aims to improve Lear's seat component capabilities while broadening its product range in thermal and comfort seating solutions, including seat heating, ventilation, and massage features, to address the increasing demand for interior comfort in vehicles. Kongsberg Automotive is a Norway-based company in the automotive industry that specializes in developing advanced laser products.

Major companies operating in the automotive hvac market include Denso Manufacturing Tennessee Inc., Air International Thermal Systems, Valeo Thermal Systems, Hanon Climate Control Corp., Calsonic Kansei North America Inc., Johnson Electric Holdings Ltd., Sanden Holdings Corporation, Sensata Technologies Inc., Marelli Corporation, OMEGA Environmental Technologies, Delphi Automotive LLP., Visteon Corp., Trans/Air Manufacturing Corp., Toyota Industries Corporation, Xiezhong International Holdings Limited., Mitsubishi Heavy Industries Ltd, Behr GmbH & Co. KG, Subros Limited, Webasto SE, Red Dot Corporation, Eberspaecher Climate Control Systems GmbH & Co. KG, DelStar Technologies Inc., Nippon Seiki Co. Ltd., Keihin North America Inc., Modine Manufacturing Company, Zhejiang Yinlun Machinery Co. Ltd., Bergstrom Inc., MAHLE Behr GmbH & Co. KG, The Keihin Corporation, Eberspächer Group, Gentherm.

Asia-Pacific was the largest region in the automotive HVAC market in 2024. The regions covered in the automotive HVAC market analysis report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, the Middle East, and Africa.

The countries covered in the automotive HVAC market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA.

The automotive HVAC market consists of revenues earned by entities by providing automotive HVAC services such as displaying system repair and service, brake service, engine light diagnostics, cooling system service, fluid maintenance, and fluid injection services. The market value includes the value of related goods sold by the service provider or included within the service offering. The automotive HVAC market also includes sales of automotive HVAC components such as A/C compressors, condensers, radiator fans, accumulators, blower fans, evaporators, and refrigerators. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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