Digest №2 - Russian HVAC market (2021)

We release a digest for you with current useful materials: articles, market researches, news, webinars, video-conferences – as the industry is continuing its development! 

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We continue to keep you up to date with market trends, current news, latest changes and innovations and help your professional development.

Our digest is devoted to HVAC market. You will learn about the development prospects and main points of growth of the heating boilers market in Russia, analyze the results of the sales in Russia in previous years, learn about the reasons for the growth. Also you will read about trends in the heating boiler market in Europe and Russia.

Also you will learn about recovery of the air conditioning market. There is information about different countries, such as Europe, the USA, Brazil and China.

Moreover, you will read about record demand of the air conditioning market in Russia and its reasons. Then we will look at split system market in Russia in 2021.

At the end of the digest, there is the overview of Russian housing and utilities projects in different regions.

The Russian market of heating boilers. Development prospects and main points of growth

To date, the market has been growing dynamically and recovering rapidly after the economic crises of 2008 and 2014. This was facilitated by key points:

  • the commissioning of residential real estate increased annually until 2015, stabilizing in the future around 80 million m2 per year.
  • the growth of real disposable incomes of the population, which pushes, among other things, to upgrade the engineering equipment of their homes; the process of renovations and repairs.

In the last few years, sales volumes of boiler equipment have stabilized. But in fact, another wave of renewal awaits us in the future, and this future is coming today.

Over the past 15 years, two relatively new segments have been formed on the market almost from scratch - these are electric and wall-mounted gas boilers. The total capacity of floor units sold in 2020 remained at the level of 15 years ago, which cannot be said about wall and electric units — their annual sales have increased more than fourfold during this time.

In order to predict the future development of the market, it is important to understand one fundamental point: the vast majority of this equipment has been installed at new construction sites, and most of these boilers are still in a fully operational condition. But the equipment is not eternal, and sooner or later it has to be changed.

The focus of manufacturers will also gradually shift in favor of communication with end users. The large replacement market determines that the quality of service and communication with end users will grow and develop at an appropriate pace in the future.

Source (in Russian) 

Trends in the heating boiler market

Today's Russian market of heating equipment largely repeats the path that Europe has taken in recent decades. This is, first of all, an increase in quality and comfort requirements. 

The current situation in sales of wall-mounted boilers in Europe is significantly different from the Russian one. Today, the European turnover for wall-mounted boilers is estimated at about 2.4 billion euros per year.

The trend of sales growth of wall-mounted boilers has persisted in Europe in recent years, even in the conditions of a downturn in the heating equipment market. Naturally, the growth of their sales is due to the displacement of more expensive floor models in production, which are still indispensable for heating large buildings.

As for the competition of heating equipment for different types of fuel, there is a noticeable decrease in the popularity of liquid fuel boilers on the European market. This may be due to certain inconveniences of delivery and the cost of fuel. In Russia, the increased demand for gas equipment is due to a well-developed infrastructure for gas delivery to the consumer and the cheapness of this type of fuel.

Today, imported heating boilers have already occupied a significant part of the Russian heating equipment market, and sales of wall-mounted boilers have already outstripped sales of floor-mounted boilers and this growth continues.

Source (in Russian)

This year the air conditioning market is showing recovery and growth

The report of the British consulting agency BSRIA on market trends in key air conditioning markets around the world shows that 2021 has become a year of recovery and growth of the industry.

In Europe, in the first half of 2021, positive signals were recorded about the growth of sales in the residential real estate equipment sector. Germany and France recorded double-digit growth in the retail air conditioner market, while the chiller market is recovering in Italy. However, in Turkey, a sharp drop in new construction slowed down the market for central ventilation systems.

In the USA, an unexpected surge in demand for split systems was due to a decrease in supply. The global shortage of chips and semiconductors and the general extension of lead times for most components have created bottlenecks in the supply chain. In Mexico, when most major projects are suspended or postponed, demand is growing in the market of chillers, medium-sized systems and in the air cooling market.

In Brazil, despite the economic and pandemic crisis, the ventilation and air conditioning markets managed to stay afloat.

At the moment, Mini-VRF systems are generally in the greatest demand. All manufacturers of coolers expect stable and profitable sales growth in the future.

Source (in Russian)

Demand for air conditioners in Russia has become a record in 10 years

"Over the past 1.5 months, the Russian retail market of air conditioners has amounted to about 250 thousand units and more than 5 billion rubles, which is more than in all six months of 2020 and the summer months of the last 10 years," the study says, reports TASS

Sales of air conditioners increased 1.5 times compared to 2020 and six times compared to the average weekly figures of May — June. At the same time, fan sales have doubled compared to last summer.

About 95% of the air conditioning market accounts for split systems, which consist of two blocks — outdoor and indoor.

Source (in Russian)

Split system market in Russia in 2021

In 2021, a very specific situation has developed in the Russian market of the air conditioners. It was formed by three main factors.

  • According to the results of 2020, the remains in warehouses turned out to be the minimum for the last 10 years – at the level of 350-370.000 air conditioners, with an optimal value of about 500,000 units.
  • The delivery of air conditioners in 2021 was complicated (and reduced) by a number of factors (sharp rise in the cost of freight of a sea container; forced increase in selling prices by Chinese factories caused by an explosive increase in the cost of raw materials; new procedure for the import of refrigerants and goods containing them).
  • The summer of 2021 is still the hottest in the European part of the country after the memorable 2010. 

These three factors have already led to a shortage of equipment. According to preliminary estimates, in 2021, demand will exceed supply by 150,000-200,000 air conditioners. And the volume of sales will be determined, first of all, by the availability of equipment from importers. 

Such weather anomalies usually have a prolonged effect, as they change the psychology of some potential consumers from among those who hesitate in assessing the need to have an air conditioner in an apartment (there are many such in the middle zone of the Russian Federation).

Source (in Russian)

By 2024, it is planned to invest at least 200 billion rubles in housing and communal services

Vitaly Korolev, Deputy Head of the Federal Antimonopoly Service of Russia, speaking at the plenary session of the All-Russian Tariff Conference held from October 12 to 14 in Yalta, noted that in 2021 one of the strategic goals in tariff regulation was achieved – the transition to its long-term. According to him, this was achieved through the adoption of the Concept of Long-term Tariff Regulation, as well as the decree of the Government of the Russian Federation introducing the appropriate mechanism. In addition, it was possible to make an important step in the digitalization of tariff regulation thanks to the unification of forms of expert opinions.

Five regions managed to achieve the maximum execution of investment programs: the Kirov Region (98.3%), the Omsk Region (97.6%), the city of Moscow (97.4%), the Republic of Tatarstan (95.3%) and the Perm Region (87.6%). In order to increase this indicator in other regions, according to Korolev, it is necessary to take a number of measures. In particular, all measures of the investment program must necessarily be based on indicators of quality, reliability and energy efficiency.

In conclusion, the deputy head of the department spoke about the strategic goals for attracting investments in housing and communal services. So, by 2024, at least 200 billion rubles should be invested annually in the housing and communal services infrastructure. And by 2030, at least 30% of the gross revenue of resource-supplying organizations should be directed to capital investments for the development of the industry.

Source (in Russian)

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