Air Conditioning and Refrigeration Overview

An Expert's View about Energy Efficiency in Mexico

Last updated: 25 Sep 2011

Summary
Despite the recent global economic crisis, the market for air conditioning and refrigeration equipment in Mexico has maintained its growth, and offers continued growth potential. The U.S. continues to be the largest foreign supplier of air conditioning and refrigeration equipment and parts to the Mexican market with imports growing 22.5 percent from 2009 to 2010 and an estimated continued growth of 20% for 2011. The focus of the industry is energy efficiency and green technology utilization.

Presently, there is a strong commitment in Mexico to energy efficiency in air conditioning and refrigeration systems. Few energy sources, the high cost of fossil fuels and their impact on the environment, make buildings one of the main focal points for finding satisfactory solutions in the saving and efficiency of energy. Energy consumed by buildings is around 40% of the energy produced at worldwide level.

NAFTA and other trade agreements have opened the market for other countries, giving consumers more product options due to the great variety of air conditioning and refrigeration units and prices. Air conditioning and refrigeration system demand is well-covered in the northern Mexico and throughout most of Mexico; however, there is opportunity for U.S. companies to sell parts and components such as heat pumps, vacuum pumps, compressors, valves, filters, etc

Market Demand
The weather has changed dramatically during the last few years, increasing the need to install air conditioning in homes and buildings. Mexico is a country with a great diversity of weather. The north and northeast are hot and arid; therefore, the use of air conditioning is high. The southeast uses air conditioning very much, while south and central Mexico use it less.

According to Mundo HVAC Magazine, consumers are investing in high-efficiency air conditioning systems yielding approximately a 12% annual savings in energy. It is estimated that Mexico is the largest market for air conditioning systems in Latin America. The annual growth rate for the sector in Latin America is estimated at 10 to 12%.

In Mexico there has been a tremendous transformation in the use of air conditioning. According to Mundo HVACR Magazine, in 1995 the use of air conditioning in homes was only 10%, now in 2011 it is 80%. The change from window units to mini-split systems has been at an exponential growth rate. In this segment, China is the leader; exports to Mexico during 2010 totaled $257,963,958 USD, followed by South Korea, whose exports totaled US$10,465,950, and the U.S. with a total of US$7,586,280.

U.S. world leaders in air conditioning systems are well established in the Mexican market with companies such as Carrier, which recently obtained the Gold LEED certification for its commitment to the environmental sustainability of its factory in Monterrey. This is the first HVAC factory in the world to receive this gold certification. Johnson Controls/York, Whirlpool, Lennox, and Trane also have a strong presence in the market. There are other foreign competitors like LG, Samsung, Nortec, Armstrong, and Goodman among others. The air conditioning and refrigeration systems demand is well covered in the North of Mexico and almost throughout Mexico; however, there is opportunity for U.S. companies to sell parts and components such as heat pumps, vaccum pumps, compressors, valves, filters, etc.

In Mexico, every year, two million home refrigerators are manufactured; 300,000 commercial refrigerators and 20,000 refrigeration units for cold rooms. However, there are over 500,000 older systems in use, which represent an opportunity for replacement parts.

Market Data
According to the Mexican Secretary of Economy, the United States is still at the top of the list of suppliers to Mexico for air conditioning and refrigeration systems with Harmonized Code 8415 and 8418, which includes air conditioning units for vehicles. However, the U.S. is not at the top of the list of suppliers to Mexico for HS 841510 which comprises the window air conditioning units, mini and multi-splits types.


Best Prospects
Air conditioning has become a need in modern life. The construction industry is also recovering after the economic crisis and it is expected that in the next years many hospitals, clinics, hotels, restaurants and supermarkets will be built throughout Mexico, which will require air conditioning systems, and many others are installing air conditioning in their current facilities. The local market is saturated in the residential, automotive, and commercial- industrial areas, however, there is a great opportunity for U.S. companies to supply those areas with parts and components such as pumps of all types; any type of compressors and valves; and any type of filters, etc. due to the fact that many of the U.S. companies currently operating in Mexico import major parts and components from the U.S.

According to experts in the industry, the sector has opened possibilities to improve in product category or line no matter what its size and application. The air conditioning industry is paying great attention to incorporating green technologies in their products and services. Also, according to Mundo HVACR Magazine, another trend in the Mexican market is the development of air conditioning and refrigeration systems through solar energy, which is still under investigation at the Energy Investigation Center of the UNAM (Universidad Autonoma de Mexico). It is expected that with this new prototype, the use of electricity will be reduced by 50% and pollution will be also reduced because of the less use of energy at the thermoelectric plants.

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Posted: 24 September 2011, last updated 25 September 2011

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