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2013 - A Year of Consolidation in the Market for Residential Air Handling Units

2014-01-17 12:27:56

New study on residential ventilation air handling units by Interconnection Consulting
In 2013 the market for residential air handling units grew by 6.9% in volume and 3.8% in value in Germany, Austria and Switzerland. Whereas the segment for decentralized systems once again grew by double digits, the segment for centralized systems has, for the first time in years, only produced a growth figure in the single digit range. A look across all product groups reveals that 54.1% of all systems sold are used in new construction projects. Interconnection estimates that the market will grow by 8.6% in 2014.

Heat-loss was Yesterday – Residential Air Handling Units are Today
An airtight building envelope, which has been increasingly employed in recent years, prevents the exchange of air through joints, cracks and windows by way of simple glazing. Heat-losses can indeed be avoided, but those that do not regularly ventilate are in danger of having a mold problem. Controlled residential ventilation systems on mechanical ventilation devices offer help and have been gaining acceptance. In fact, 214,848 residential units were equipped with controlled residential ventilation systems in Germany, Austria and Switzerland in 2013. This corresponds to a market volume of 378.1 million euros. Of these, 59.7% (225.7 million euros) is allotted to the product group of centralized systems with heat recovery. Decentralized ventilation systems generated 15.5% of sales. The rest was generated through exhaust systems without heat recovery.

Consolidation in the Segment for Centralized Systems with Heat Recovery
Compared to both 2011 and 2012, a time in which the market had grown by double digits, the year 2013 has seen growth rates fall to single digits. Growth in terms of value was only 3.8%, but the market did grow by 6.9% in terms of quantity. On one hand, new construction projects slightly declined in comparison to previous years; on the other hand, manufacturers were less concerned with the sale of ventilation systems and more concerned about themselves. This is particularly true for the segment for centralized systems with heat recovery: Pluggit was acquired by the Spanish group Solar & Palau, and GLT was acquired by the Belgian Ventilair Group.

Germans are Pragmatic - Cultural Differences are being Renovated
The segment for decentralized systems with heat recovery (one air handling unit per room) remains unaffected by this trend and has actually grown by 13.0% in volume and 12.5% in value. Despite solid growth rates in Austria and Switzerland, single-room ventilators remain a German phenomenon: Interconnection estimates that in the year 2013 37,133 dwellings were equipped with this ventilaton system. Such strong growth rates can be explained by Germany’s lower susceptibility to slowing construction activity. Internationally, 51.7% of all single-room ventilators are sold for renovation projects. In comparison, centralized systems comprise only 16.1%. However, there are country-specific features at work here. Whereas 47.9% of all single-room ventilators sold in Germany are for renovation projects in Germany, that same figure is 90.7% in Switzerland. The segment for new construction projects is clearly dominated by centralized systems.

The Condemned Live Longer
The segment for exhaust systems without heat recovery grew by 5.1% in quantity and is the largest product group by volume at 46.8%. Contrary to many expert opinions, Interconnection expects solid growth in this segment for the coming years. Stricter regulations are not being forced by public policy; thus, exhaust systems not only benefit from low average prices, but also from the low energy consumption. "In view of rising energy prices, an exhaust system without heat recovery appears to be a sensible option" said Dennis Rauen, author of the study.

Calls for Tenders are Pushing Down Prices for Centralized Systems with Heat Recovery
The study has also shown that the industry is facing strong competitive pressure and that this pressure is driving down prices. This is particularly true for the product group of centralized systems with heat recovery, for providers undercut each other through a tendering process. Products that are often used in renovation are not affected by this development. Pressure on prices is the least noticeable in Germany because new construction activity has continued unflinchingly and ventilation systems have grown disproportionately. The situation, however, is different in Switzerland: here construction activity is stable, but the market is highly saturated. In recent years the entrance of other manufacturers into the market has forced the established manufacturers to reduce their prices.

Cultural Differences in Renovation
Interconnection anticipates a both cross-country and cross-product growth rate of 8.9% in quantity for 2014. Mr. Rauen states that decentralized systems have the greatest potential in the medium term. Their growth rate will be around 13.7% per year in the period of 2012 - 2016. In this context it will be interesting to see how the so-called window air handling units with heat recovery develop. These were developed in the last few years by window and fitting manufacturers as well as by window frame makers and are mounted below the window as a single-room air handling unit. In the year 2013 around 10.5 million windows were sold for residential construction sector in Germany, Austria and Switzerland, of which 7.4 million were for renovation projects. According to the author, it is obvious for the end customer to also install the ventilation unit when replacing a window, as the customer saves renovation costs and a construction site. It remains to be seen how the traditionally conservative window industry responds to these innovations.

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IC Market Tracking® is an annually published industry report covering market and competition analysis and forecasts per country and by product group based on primary research.

Copyright: Interconnection, Publication free of charge for coverage regarding the study and InterConnection Consulting



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