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BSRIA reports on $5bn Latin America market

UK: The air conditioning market in Latin America has reached close to $5bn in 2019, a year-on-year market growth of 6% exceeding that of North America.

The latest survey from market intelligence company, BSRIA, reveals that over 8.9 million units were sold in 2019 of which 90% were splits. 

BSRIA describes the Latin American market as an immature market but one with commercial opportunities despite political and economic fluctuations.

In Brazil’s white and brown electro-domestic product categories, air conditioning is amongst the few segments with an upward trend in sales, says BSRIA. 

Argentina has been suffering the effects of the economic crisis in mid-2018 when doubts rose about the government’s financial commitments causing the local currency to further drop in 2019. Not all AC product segments were affected to the same degree and a double digit growth was recorded in the mini VRF (<20kW) segment. 

Mexico has also seen an increase in VRF, despite the negative economic cycle which has made consumers increasingly price driven. Inverter adoption has dramatically increased in 2019 as well as the implementation of new refrigerants, like R32, in chillers and residential units.

Looking beyond those largest three markets, BSRIA reports underlying growth potential across the region. 

Tourism and a buoyant manufacturing activity of medical devices are said to be the main drivers in the development of Costa Rica. Despite the current economic stagnation, BARIA maintains that these two industries will continue to generate demand for both residential and commercial air conditioning in the longer term.

In Chile the potential for residential air conditioning growth following the transition from unsophisticated heating practices remains high. In the Dominican Republic the demand for cooling is on the up thanks to an increased disposable income, a growing population and a boost from the hospitality sector.

BSRIA pinpoints the affordability of residential air conditioning as the main barrier to market expansion in a country like Colombia where poverty levels are still high. More opportunities are seen in commercial applications, a sizeable segment in the country. Small offices, retail units and some government buildings adopt single splits as an affordable alternative to other more expensive solutions including rooftops and applied.

The air conditioning market in Panama is the largest in Central America despite the size of its population, which is the smallest in the region after Belize. The economic relevance of Panama is due to the existence of the Canal making the country one of the most important trade hotspots in the world. The outlook is for 

A slow recovery of investments in construction in Panama is expected to drive a growth in the air conditioning market in 2021, whereas the outlook for 2020 remains uncertain. 

The air conditioning market in Puerto Rica picked up along with the growth in construction following the devastation caused by hurricane Maria in 2017. The country is also amongst other states announcing their plans to follow California’s lead on HFC phase downs.

With growth by value close to 5%, Peru is described as a market dominated by single ductless split units. Energy saving concerns are favouring the penetration of inverters and the adoption of VRFs.

BSRIA’s Latin America Regional Study covers 10 major markets researched individually: Argentina, Brazil, Chile, Colombia, Costa Rica, Dominican Republic, Mexico, Panama, Peru and Puerto Rico. The remaining countries are estimated through pan-regional interviews and modelling and combined as others among 4 regions: North, Central, South and Caribbean.

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