With year-after-year double-digit growth and a projected compound annual growth rate (CAGR) of more than 14 percent between 2013 and 2020, opportunities in the ductless market are sprouting like May flowers.
“It’s, without question, one of the fastest-growing segments in North American HVAC,” said Tom Lahutsky, senior product manager, Lennox Intl. Inc. “The market is very competitive. There are a lot of different solutions out there from some very good suppliers. This growth, which means more units are being shipped, pulls all the manufacturers in.”
Lennox is one of many companies updating its product portfolio in an effort to keep up with the accelerated progress of the sector.
“The ductless market will continue to grow. We don’t see any end in sight for it,” said Lahutsky. “We’ll continue to invest in this area and update our products.”
Investing in Ductless
“Our customers told us there was an opportunity to meet their needs better, to make their homes more comfortable and their businesses more efficient,” said Meredith Emmerich, general manager, ductless and VRF (variable refrigerant flow) systems, Carrier Corp. “We listen to the people around us. We all live in the same homes, go to school together, and work in the same offices. We said, ‘There’s an opportunity here to make these environments more comfortable, efficient, and user-friendly.’ And that kind of sparked this next-generation ductless evolvement for Carrier. We built in the feature set we heard from our customers, including high efficiency, strong heating performance, and controls. This is a complete, comprehensive, multi-tier lineup for both residential and commercial segments.”
According to Emmerich, the new line addresses just about every market need, pricing consideration, and special situation to meet the needs of customers.
“The ductless market is growing very quickly. The possibilities are endless — it’s that exciting,” Emmerich said. “I would say it’s as competitive as the entire HVAC market as a whole. We’re getting to the point where there are lots of competitors in the marketplace, but, when we look at the overall HVAC market, there’s lots of competition in all areas. Consumers are looking for a name they know and trust when it comes to air conditioning or heating their homes and businesses. And, you’re going to see the brands consumers know and trust continue to rise to the top and lead that business.”
Daikin Industries Ltd. is also committing itself to the ductless market with its recent announcement of a new $417 million business campus that consolidates its manufacturing and logistics footprints in Houston. The consolidated campus will enable Daikin to manufacture its full range of energy-efficient ducted residential and light commercial products as well as various ductless products that are currently imported from other intercompany business units located outside of North America in one location. In fact, the facility will manufacture both ducted and ductless HVAC products, which is a first for Daikin.
“By manufacturing ductless products in the U.S., we’ll be able to respond to market needs more quickly and have a quicker route to market through manufacturing and distribution,” said John Clements, director of ductless products, Daikin Industries Ltd. “We’re also bringing a wider range of products into the U.S. and looking at products that have traditionally been offered globally by Daikin.”
Clements said the manufacturer is also looking into new products that are focused and designed specifically for the North American market, such as products that are more aesthetically appealing, better concealed, provide a greater range of low ambient operation, and integrate Wi-Fi smart controls that are appealing to North American consumers.
The new facility is scheduled to open in the second half of 2016, and ductless products are among the first to hit production, Clements noted.
“Originally, many of the unitary brands sort of saw ductless as a fluke — that it wouldn’t continue,” he said. “Now, they believe ductless growth is here to stay, both for add-ons for traditional homes, especially as efficiency standards and building codes change in its favor.”
Clements said most manufacturers have already entered the ductless market at this point. “However, it’s a question of, ‘Whether they’re manufacturing their own products, or are they really private labeling someone else’s products from overseas,’ which is what most of the unitary manufacturers are doing today,” he said. “Some of them are beginning to put more emphasis on it and are bringing in a wider range of ductless products. But, that’s one of the big things for people to consider today: When they buy ductless products, what are they really buying? What is the brand that’s really behind the equipment?”
Jeff Peters, ductless portfolio leader at Trane, an Ingersoll Rand brand, agrees the ductless market is increasingly competitive with formidable global suppliers.
“As ductless technology becomes more mainstream and widely accepted, HVAC manufacturers are investing to capture their slice of the market-share pie,” Peters said. “We continue to see technology and product enhancements at a rapid rate, with competitors constantly leapfrogging each other. Several suppliers are also electing to buy installed bases by engaging in price wars.
“The total available market for ductless products in North America is second only to light commercial in all HVAC categories; however, the CAGR for ductless is, by far, the highest,” he added. “Engineering firms, mechanical contractors, architects, and owners often prefer ductless systems due to their many advantages over traditional forms of HVAC equipment.”
According to Peters, Trane is enjoying success and growth in its commercial and residential channels. “Trane has continued to invest in products and leading technology, leveraging the Trane difference and overall ease of doing business. Significant attention and energy is being expended to educate and create awareness in the marketplace. Customers will partner with suppliers that provide a delightful experience; then, you have a customer for life.”
And, as more and more people become aware of the advantages ductless products offer, the market will continue to grow.
“You’re going to see ductless continue to expand in the home and in multifamily environments, as well,” Emmerich said. “It’s traditionally done very well in commercial applications, but homeowners are starting to understand there’s a solution for their needs, whether it’s their man cave in their basement, sunroom, or master bedroom. It’s a solution that can go in fairly easily that makes their homes much more comfortable.”