Saudi Arabia Air Conditioning Market Overview

Market Size in 2024 : USD 2.55 Billion

Market Size in 2033: USD 5.11 Billion

Market Growth Rate 2025-2033: 7.20%

According to IMARC Group's latest research publication,"Saudi Arabia Air Conditioning Market Size, Share, Trends and Forecast by Product, Application, and Region, 2025-2033", The Saudi Arabia air conditioning market size reached USD 2.55 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 5.11 Billion by 2033, exhibiting a growth rate (CAGR) of 7.20% during 2025-2033.

Three Growth Factors Driving the Saudi Arabia Air Conditioning Industry

• Rapid Urbanization and Infrastructure Development

The Saudi Arabian cities, such as Riyadh and Jeddah are experiencing an explosion of construction including residential high-rises, to megaprojects like NEOM and the Red Sea Project. More than 555000 new homes and 275000 hotel rooms are being constructed to satisfy the increased demand, and all of them require energy-efficient cooling to deal with the blistering weather in which temperatures regularly surpass 45oC. This increase in population in cities adds to the persistent demand of air conditioners in residential buildings, work place and places of business such as malls and hotels. Government programs like the vision 2030 are sinking investments into smart cities and infrastructure, which is stoking the demand. In 2024 alone, 200 new hotels were opened in the hospitality industry alone, and all of them needed high-capacity AC systems because, in extreme heat, the guests need to be comfortable.

• Extreme Climate and Rising Temperatures

In Saudi Arabia, incessant hot weather in summer when temperatures rise well beyond 45 o C, air conditioning is a prerequisite and not a luxury. The unerring heat brings uniform demand both at home, in businesses, and in industries, because cooling systems are highly essential to daily life activities and to the operations. A more recent estimate indicates that in 2024 Saudi Arabia had consumed 4.6 million AC units, one of the largest per capita levels in the MENA region with 126 units per 1,000 of the population. Such demand is further enhanced by occurrence of heatwaves in a more regular manner that has prompted consumers and business to consider cooling solutions that are reliable. The government stimulus toward the introduction of modern infrastructure, such as intelligent buildings, also implies that new constructions are to provide the AC system of high standards to match the comfort and regulatory requirements, which would fuel the industry development further.

• Government Push for Energy Efficiency

The Saudi Energy Efficiency Program (SEEP) is transforming the demand of the AC market by marketing energy-efficient equipment to ease the load on the National grid. Since air conditioners consume a large part of the energy, government is encouraging the manufactures and users to use greener technologies such as inverter based air conditioners. In 2024, sales of AI-enabled ACs exceeded 100,000 units, which is an indication showing a transition to energy-saving and more smart ACs. Firms such as Daikin and Samsung are inventing to align to such standards and they have come up with products that reduce consumption of energy but keep up performance. This area of sustainability ties together with the ambitions of the environmental segment of Vision 2030 orienting business and households towards the low-cost retrofitting of the currently used systems, which in turn will trigger the market rates as the demand regarding the compliant units increasing in price due to the efficiency gap.

Three Emerging Trends in the Saudi Arabia Air Conditioning Market

• Rise of Smart and IoT-Enabled AC Systems

Internet-of-things-powered smart air conditioners are becoming more popular in Saudi Arabia and are enabling individuals to control and manage smart appliances efficiently. In 2024 500 000 plus smart AC units would be sold when the user needed more cooling systems that can be adjusted as per the usage pattern. As an example, LG and Samsung have commercialized AI-based units capable of tracking habits and optimize energy consumption, matching the interests of techie homes and smart cities initiatives. Such systems enable remote control through applications, which is mostly convenient in the offices and homes. This tendency corresponds to the smart city programs of Saudi Arabia, where 10 new projects have been announced in 2024, and the priority is placed on IoT-driven infrastructures. These changes are changing the use of cooling systems and currently it is an important attribute in a modern structure.

• Growth in Inverter and Solar-Powered Units

The use of inverter technology as well as solar powered air conditioning is gaining ground as consumers demand energy efficient systems that are environment friendly. There was an increase in demand of Inverter ACs that run compressor at lower speed to conserve energy, and costs of compressors started to be between 150 and 500 dollars based on capacity. Firms such as Mitsubishi Electric and Carrier are also forking out several resources in these technologies in a bid to address the market demands. Solar-driven units are on the rise as well as these are used mostly in business environments because it would lessen the dependency on the grid. An example is the Red Sea project that includes solar-powered cooling in their sustainable designs. This is a trend that shows that consumers are realizing that these units will cause long-term savings and these units will continue to be a growing market.

• Expansion in Hospitality and Tourism Sectors

Hospitality is a key generator of the AC demand, where in 2024, more than 200 new hotels will be opened, at least in Riyadh alone; at least 50 new luxury hotels have opened in the city. Vision 2030 seeks to give a tourist destination of 100 million annual visitors by the year 2030, which triggers the development of hotels and resorts, which in turn necessitates the extensive cooling systems. As an example, NYRNEOM and Qiddiya projects are incorporating cutting edge AC technologies to facilitate the comfort of visiting guests even in harsh weather conditions. Such systems are technology smart and energy efficient as they are global requirements. Retail and commercial outlets such as new malls do so as well since they require a heavy cooling system in busy crowds. It is an indication of the development of the tourism industry in terms of growth leading to advancement and expansion of AC industry in order to manage increased demand.

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Saudi Arabia Air Conditioning Industry Segmentation:

The report has segmented the market into the following categories:

Product Insights:

• Room/Unitary Air Conditioners
• Chillers
• VRF Systems
• Coolers
• Others

Application Insights:

• Residential
• Healthcare
• Commercial and Retail
• Hospitality
• Others

Regional Insights:

• Northern and Central Region
• Western Region
• Eastern Region
• Southern Region

Competitive Landscape:

The market research report has also provided a comprehensive analysis of the competitive landscape. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

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Future Outlook

Saudi Arabia air conditioning market has great potential of further growing, as it continues to be driven by protracted urbanisation, intense climate requirements, and sustainability drive. As more than 555,000 new homes and 275,000 hotel rooms are slated construction, the cooling systems will also be needed and desired strongly, in the mega-projects such as NEOM. The already witnessed trend of smart, IoT motivated ACs, selling 500,000 units in 2024, heralds a day when technology will make them more efficient and enjoyable. Energy saving programs such as the Saudi Energy Efficiency Program by the government will keep systems saving energy on the radar, having other companies such as Daikin and LG to be innovative on them. Nonetheless, the issues such as excessive energy expenditure and external dependence, which reduced by 90 percent in 2023-2024, can drive domestic production. Evolution of the market will be balanced by the need of consumer, the development of technology, and the environmental issues, which ensures sustainable growth.

Research Methodology:

The report employs a comprehensive research methodology, combining primary and secondary data sources to validate findings. It includes market assessments, surveys, expert opinions, and data triangulation techniques to ensure accuracy and reliability.

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