Saudi Arabia Air Conditioning Market

Saudi Arabia Air Conditioning Market Overview:

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. The market has grown due to policy-led energy efficiency programs, extreme heat conditions, and rising demand from construction and urban expansion. Local production initiatives and consumer upgrade incentives have further supported sustainable product adoption. This has positively impacted Saudi Arabia air conditioning market share, strengthening domestic competitiveness and long-term market growth.

Saudi Arabia Air Conditioning Market Trends:

Policy Incentives Boost Energy Transition

Saudi Arabia’s air conditioning market is steadily shifting towards energy efficiency, largely driven by targeted government initiatives aimed at reducing power consumption and promoting sustainable living. With the country experiencing prolonged summers and heavy reliance on cooling systems, energy efficiency has become a national priority. Programs supporting household upgrades are helping accelerate the adoption of modern, power-saving air conditioning units across the Kingdom. In September 2024, the Saudi Energy Efficiency Center (SEEC) expanded its “Estbdal” initiative nationwide, offering SR1,000 discounts, along with free delivery and installation, to encourage citizens to replace outdated window air conditioners with energy-efficient models. More than 350 showrooms and over 50 retailers joined the initiative, supported under the National Industrial Development and Logistics Program (NIDLP). This full-scale rollout followed a successful pilot in seven major cities, which concluded in late 2023. By removing financial and logistical barriers, the initiative prompted a faster replacement cycle and directly contributed to reducing household electricity use. These developments are expected to help push the Saudi air conditioning market’s value from SR2.3 Billion in 2024 to SR3.1 Billion by 2029. Such energy-focused incentives are shaping consumer behavior, boosting demand for high-efficiency products and favoring Saudi Arabia air conditioning market growth.

Manufacturing Localization Drives Market Expansion

The localization of production is emerging as a major driver in Saudi Arabia’s air conditioning market, supporting long-term goals of industrial growth and economic diversification under Vision 2030. As the country aims to reduce its dependence on imports and build competitive domestic industries, there has been a clear push to strengthen local manufacturing capabilities within the HVAC sector. In May 2024, Basic Electronics Company partnered with Chinese appliance giant Gree to establish a smart HVAC factory in Dammam. Spanning 70,000 square meters in its first phase, the Al Asasyah Advanced Industry facility focuses on producing smart air conditioners with Variable Refrigerant Flow (VRF) systems and solar integration. Over 2,000 professionals are expected to be employed across research, testing, and production units. The factory includes labs, AI-driven technologies, and training centers, reflecting Saudi Arabia’s shift toward high-tech, energy-conscious manufacturing. This development is set to reduce import dependence, encourage knowledge transfer, and support the Kingdom’s sustainability and job creation goals. By producing modern HVAC systems locally, Saudi Arabia can better respond to internal demand, control quality, and stabilize supply. Such projects demonstrate how investment in advanced local manufacturing is helping expand the air conditioning market while reinforcing economic resilience and innovation.

Saudi Arabia Air Conditioning Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the market, along with forecasts at the country and regional level for 2025-2033. Our report has categorized the market based on product and application.

Product Insights:

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

The report has provided a detailed breakup and analysis of the market based on the product. This includes room/unitary air conditioners, chillers, VRF systems, coolers, and others.

Application Insights:

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

The report has provided a detailed breakup and analysis of the market based on the application. This includes residential, healthcare, commercial and retail, hospitality, and others.

Regional Insights:

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

The report has also provided a comprehensive analysis of all the major regional markets, which include Northern and Central region, Western region, Eastern region, and 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.

Saudi Arabia Air Conditioning Market News:

• February 2025: Ceer signed a partnership with Zamil Central Air Conditioners Co. Ltd. during the PIF Public Sector Forum. This collaboration supported HVAC component localization for electric vehicles, boosting domestic air conditioning manufacturing and aligning with Saudi Arabia’s broader industrial and energy efficiency goals.
• September 2024: Saudi Arabia expanded its “Replace Old Window Air Conditioners” initiative nationwide, involving 50+ retailers, 350 showrooms, and four local manufacturers. Backed by SEEC and NIDLP, the program promoted energy-efficient upgrades and strengthened domestic production, enhancing long-term growth in the air conditioning market.

Saudi Arabia Air Conditioning Market Report Coverage:

Key Questions Answered in This Report:

• How has the Saudi Arabia air conditioning market performed so far and how will it perform in the coming years?
• What is the breakup of the Saudi Arabia air conditioning market on the basis of product?
• What is the breakup of the Saudi Arabia air conditioning market on the basis of application?
• What is the breakup of the Saudi Arabia air conditioning market on the basis of region?
• What are the various stages in the value chain of the Saudi Arabia air conditioning market? 
• What are the key driving factors and challenges in the Saudi Arabia air conditioning market?
• What is the structure of the Saudi Arabia air conditioning market and who are the key players?
• What is the degree of competition in the Saudi Arabia air conditioning market?

Key Benefits for Stakeholders:

• IMARC’s industry report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Saudi Arabia air conditioning market from 2019-2033.
• The research report provides the latest information on the market drivers, challenges, and opportunities in the Saudi Arabia air conditioning market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Saudi Arabia air conditioning industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.