Automotive Refrigerant Market Size, Share, Industry, Forecast and Outlook (2024-2031)

Global Automotive Refrigerant Market Size, Share & Trends Analysis Report By Product, By Distribution Channel, By Vehicle, By Region, And Segment Forecasts, 2024 - 2031

Market Overview

Global Automotive Refrigerant Market reached US$ 2.7 billion in 2023 and is expected to reach US$ 5.4 billion by 2031, growing with a CAGR of 9.1% during the forecast period 2024-2031.

The increased production of automobiles is the primary driver of the automotive refrigerant industry. As environmental consciousness grows, the industry is shifting towards eco-friendly items. The automotive refrigerant market is being driven by increasing automotive demand, increased demand for temperature control systems in electric vehicles and rising customer desire for comfort within automobiles.

The increased demand for private vehicles, as well as the advent of the rental industry, are expected to drive market expansion. In today's environment, people spend more time on the road, either in their own vehicles or on public transportation. As a result, the growing quantity of time spent traveling and the rising use of private vehicles over public transportation is likely to drive market expansion.

In 2023, North America is expected to be the second-dominant region with over 20% of the global automotive refrigerant market. Government incentives and subsidies in the region encourage the use of ecologically friendly technology, such as low-GWP refrigerants, which boost market growth. The incentives encourage both producers and customers to switch to greener refrigerant solutions. Policies that encourage the use of electric vehicles indirectly increase the demand for specialist refrigerants needed for the advanced cooling systems of these vehicles.

Market Scope

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Market Dynamics

Higher Time Spent Inside Car Due to Comfort

Long-distance travel and escalating traffic congestion are the primary factors contributing to increased hours spent inside vehicles. Automotive HVAC systems are now standard features in passenger automobiles and commercial vehicles are increasingly employing them. The systems are being rapidly adopted in developing nations such as India, where the overall climate is hot. Owing to this, nations with hot climates are expected to provide most of the revenue in the automotive refrigerant market. 

Furthermore, as traffic congestion in metros continues to worsen, lengthening commuting times, the demand for convenience features to improve comfort and reduce stress levels grows. HVAC systems offer a clean and healthy environment inside automobiles. As a result, more time spent on automobiles will boost the growth of the automotive refrigerant market over the forecast period. 

Growing Popularity of Multi-zone Climate Control Systems 

Automotive climate control systems have evolved into multi-zone climate control systems, which eliminate the need for a single temperature control for the entire car cabin. Each zone contains a separate temperature sensor that reads the current temperature of a given region and takes appropriate action in terms of warming or cooling. 

DENSO is the main vendor of multi-zone temperature control systems, having developed the first system by dividing the car cabin into three zones: driver, front passenger and rear seat sections. Furthermore, this technology is seeing widespread acceptance in the luxury automotive category, with OEMs such as Lexus, BMW and Audi developing distinct multi-zone temperature control systems. For example, the Lexus LX 570 has a four-zone climate control system. The factors are expected to drive the growth of the automotive refrigerant market during the forecast period. 

Rising Environmental Concerns

Refrigerants utilized in automobile HVAC systems have a negative influence on the environment, which is one of the most significant difficulties confronting the globally automotive refrigerant industry. The market could suffer a significant setback because the major refrigerant used by the car industry is R-134a, which has a high GWP of 1,400. The gas utilized in automobile HVAC systems is a greenhouse gas and thus extremely damaging to the environment. 

HVAC gas has a much stronger global warming potential than CO2. Furthermore, the high cost of R-1234yf refrigerant (10 times that of R-134a) is limiting its widespread adoption, as APAC has the biggest volume of vehicle sales and is known for its price-sensitive clients.

Segment Analysis

The global automotive refrigerant market is segmented based on product, distribution channel, vehicle and region.

Rising Production of Passenger Car Drives the Segment Growth 

Passenger car is expected to be the dominant segment with over 30% of the market during the forecast period 2024-2031. The passenger vehicle market is expanding rapidly, with demand for sedans, coupes, hatchbacks, crossovers and SUVs increasing in China, U.S., Canada, India, Germany, France, UK and Spain. Rising disposable incomes, as well as many easy and appealing vehicle financing programs established by financial institutions and automobile manufacturers, are driving up vehicle demand. 

It contributes to the growth of the global automotive refrigerant market. Government rules governing the GWP of refrigerants also influence the passenger cars market segment. Advanced refrigerants have a lower GWP, but are more expensive. As a result, rules requiring the use of such refrigerants will boost the growth of the passenger cars of the global automotive refrigerant market during the forecast period.

Geographical Penetration

Rising Vehicle Production in Asia-Pacific

Asia-Pacific is expected to be the dominant region in the global automotive refrigerant market covering over 35% of the market. The region is a major automotive manufacturing hub, with important producers including China, Japan, South Korea and India. Continuous expansion in car production immediately increases demand for automotive refrigerants. To reduce greenhouse gas emissions, regional governments are putting in place tough emission standards and regulations. 

As a result, many countries in the region are making significant expenditures to transition from internal combustion engine to electric vehicles, with the goal of reducing carbon emissions. For example, in December 2020, TransJakarta, a city-owned bus operator in Indonesia, announced an ambitious ambition to increase its electric bus (e-bus) fleet to 10,000 units by 2031. It has led to a shift towards low-GWP refrigerants, driving market growth. 

Competitive Landscape

The major global players in the market include Arkema Inc., Chemours Company, Dongyue Group Ltd., DURACOOL Refrigerants Inc., Honeywell International Inc., Linde AG, Mexichem, S.A.B. de C.V, National Refrigerants, Inc., Sinochem American Holdings, Inc. and Vision Global Technology.

COVID-19 Impact Analysis

The pandemic caused temporary shutdowns of manufacturing factories and production facilities globally. It caused delays in the production and supply of vehicle refrigerants, resulting in shortages and backlogs. Lockdowns and movement restrictions caused disruptions in globally logistics and transportation networks. It hampered the timely delivery of raw supplies and final products, increasing lead times and transportation expenses.

The early phases of the pandemic saw a dramatic drop in vehicle production and sales as consumer demand declined owing to economic instability, job losses and lockdowns. It directly lowered the demand for vehicle refrigerants. As limitations were lifted and economies began to recover, vehicle production and sales rose, resulting in a rise in demand for refrigerants. However, the recovery was unequal across regions and markets.

Russia-Ukraine War Impact 

Automotive refrigerants are produced using a variety of raw materials, some of which are sourced or transported through conflict-affected locations. Disruptions in the availability of these commodities might cause shortages and production delays. It hampered transportation routes, particularly in Eastern Europe, impeding the rapid distribution of raw materials and finished refrigerants. The disruptions have resulted in higher shipping costs and logistical issues for producers.

The battle caused volatility in global energy costs, notably natural gas and oil, which are critical for refrigerant manufacture. Higher energy costs drive up overall manufacturing costs for refrigerant makers. The war has caused instability in the prices of raw materials needed in refrigerant production, such as fluorine and hydrocarbons, hurting manufacturers' cost structures.

By Product

• R134a
• R1234yf
• Others

By Distribution Channel

• OEM
• Aftermarket

By Vehicle

• Passenger car
• Commercial vehicle

By Region

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Russia
  • Rest of Europe
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Asia-Pacific
  • China
  • India
  • Japan
  • Australia
  • Rest of Asia-Pacific
• Middle East and Africa

Key Developments

• In May 2022, Honeywell International Inc. has introduced Solstice 456A, a novel hydrofluoroolefin-based refrigerant aimed at the European automotive aftermarket with the potential to reduce greenhouse gas emissions from air conditioning systems in existing automobiles by more than 50%.

Why Purchase the Report?

• To visualize the global automotive refrigerant market segmentation based on product, distribution channel, vehicle and region, as well as understand key commercial assets and players.
• Identify commercial opportunities by analyzing trends and co-development. 
• Excel data sheet with numerous data points of automotive refrigerant market-level with all segments.
• PDF report consists of a comprehensive analysis after exhaustive qualitative interviews and an in-depth study.
• Product mapping available as excel consisting of key products of all the major players.

The global automotive refrigerant market report would provide approximately 62 tables, 49 figures and 181 pages.

Target Audience 2024

• Manufacturers/ Buyers
• Industry Investors/Investment Bankers
• Research Professionals
• Emerging Companies