The Residential HVAC Market in Italy

An Expert's View about Domestic Appliances in Italy

Last updated: 10 Mar 2011

Summary

The Italian market for residential air conditioning (A/C) equipment (which includes light commercial) can be considered one of the biggest markets in Europe in terms of internal consumption and quantity. In 2008, the residential A/C market was estimated at 2.5 million USD, representing a significant increase with respect to the previous year. The Italian market is mature and dominated by foreign firms, making it a highly competitive market. Imports represent the lion’s share of the total Italian market and have shown considerable growth.

 

A positive factor that has characterized this subsector during the last decade is changing consumer preferences. While A/C has not been that popular with Italians in the past, more and more Italians are now enjoying the comfort of air-conditioned environments, particularly utilizing small units offering energy savings and climate control.

 

This report covers air conditioning for residential use and includes only small units whose capacity does not exceed 250,000 BTU/H, as opposed to the medium-sized machines (250,000-2,400,000 BTU/H) and the large installations (over 2,400,000 BTU/H) which are normally used in industry such as factories, hospitals, supermarkets, sports facilities, etc.

 

Market Demand

Italy is considered among the most important European markets for air conditioning equipment, and Italian manufacturers are among the most important European producers. Historically Italian producers have been reputed to be among the most technologically advanced and well known for their after-sales service network. Italian manufacturers have undergone a process of improvement and innovation in their production and must continue in this vein mainly due to strict EU legislation, forcing them to commit to more investments and technological improvements.

 

RAC-window units have virtually disappeared as in the rest of Europe for both technical and aesthetic reasons. These units are found to be noisy and do not meet sophisticated Italian taste. Mono-split and multi-split units are particularly widespread among Italian households, with the mono-split taking the lead. Mono-split units are comprised of one internal unit and one external unit. Multi-split units consist of one external unit and two or more internal units. The market for split units saw a rapid expansion in Italy (and in general in all of Europe) after Japanese producers introduced basic technological innovations. The aggressive marketing strategies adopted by Asian manufacturers during the early 1990’s provoked the prompt reaction of Italian producers (including those firms with foreign capital) who modified their technology in order to remain competitive.

 

Portable units are very popular in Italy and in Europe in general because they can be transported from one room to another. Italian manufacturers consider themselves the inventors of this type of unit, which only began to enjoy a substantial market share when several of the more important Italian manufacturers took interest in this model. Since there were virtually no foreign competitors in the early stages, the Italian manufacturers at first held nearly the entire market share and sales took off. They rapidly became popular in other foreign markets as well. The simplicity of installation has distinguished this model in the Italian market particularly among users who have found this to be a key factor in the purchase of such models, and have especially boosted unprogrammed purchases during unexpected heat waves. A positive factor that has characterized this subsector during the last decade is changing consumer preferences. While Italians have not been major users of air-conditioning in the past, there is a growing trend for more and more Italians to enjoy the comfort of air-conditioned environments, particularly utilizing small units offering energy savings and climate control. These include air-conditioning units which allow for finely-tuned temperature control, perhaps allowing reversal of heat and cold, with minimal energy consumption.

 

Major domestic producers include Aermec S.p.A., AR Riscaldamento S.p.A., Riello Condizionatori, RC Group S.p.A., Merloni TermoSanitari S.p.A and Climaveneta. These companies export a substantial portion of their production, and their markets include North Africa, the Middle East, Europe and the U.S. Europe represents Italy’s most important export market, where approximately 68 percent of its products are shipped. France, Spain and Germany are Italy’s most important export destinations in Europe. Other small manufacturers have cut down production and are shifting to imports of complete units and/or parts from Japan and the Far East. These firms tend to distribute small units for domestic use and for exportation to third countries.

 

The Italian market is mature and dominated by foreign firms, making it a highly competitive market. Imports represent the lion’s share of the total Italian market and have shown considerable growth. Nearly all split and multi split units sold in 2008 were imported products. Over 50 percent of imported products are imported from Asian countries, 35 percent from Europe, and smaller percentages from Africa, Oceania, North America and Central and South America. U.S. manufacturers such as Carrier, York, Trane and McQuay have long-established Italian subsidiaries and are well known throughout the country.

 

In the past years, Japanese A/C manufacturers have aggressively marketed their products in Europe, including Italy, with the majority having opened local production facilities. Japanese manufacturers have expanded their operations and will likely continue to do so in the future. Firms including Hitachi, Daikin, Fuji Electric, Mitsubishi Electric, Sharp and Toshiba make up over 30 percent of the import market. Japanese products are well known and have a very good reputation for being compact and reliable, and their technical support is very effective through a major network of dealers, distributors and installers which covers major cities and rural areas.

 

Other major exporters to Italy include Germany (Vortex, Wolf Klimatechnik), Spain (Roca), and France (Saunier-Duvall). The remaining share of imports is divided among other European and Far Eastern suppliers. In recent years, there has been an increase in the amount of A/C equipment being imported from countries such as China, Taiwan and Malaysia due to their very competitive low prices. However, rarely does this equipment meet European Union standards which, unfortunately, are not enforced as should be.

 

Quality and after-sales-service are two competitive factors of equal importance for the successful marketing of A/C equipment in the Italian market. The presence of a nationwide service organization which can guarantee installation and maintenance will prove a definite advantage. Other competitive factors include: pricing, ease of installation and low operating costs; technical factors include limiting noise pollution and ensuring energy saving qualities (high cost of electricity and limitations of 3 kw/hour per household). In addition, residential A/C units should be of attractive design to meet Italian sophisticated taste, and, at the same time, of small dimensions to minimize space requirements in small apartments, shops or studios.

 

The challenge in the years ahead will be to produce energy efficient units and no longer necessarily lowcost products in light of new EU directives regulating emissions and energy consumption. Many private investors are developing technologies that should open new and attractive market niches in the residential and tertiary sectors. The SunLab at University of Palermo is nowadays an important reference point for the solar cooling research in Italy.

 

In terms of government programs that should provide impetus to the A/C market, it is worth noting the recently introduced stimulus plan named “Piano Casa” that gives homeowners the possibility to enlarge certain buildings up to 20 percent. One of the objectives of the plan is to improve the energy efficiency of buildings. In addition to “Piano Casa”, other tax incentives (including those directed towards the use of energy efficient and renewable sources) are also expected to sustain residential renovation activities. This should provide room for growth in the next several years.

 

By Maria Calabria

 

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Posted: 23 August 2010, last updated 10 March 2011