San Antonio, Texas--With environmental concerns over rising nitrogen oxide (NOx) emissions, hot water heating equipment manufacturers will need to devote significant resources to making more environmentally friendly systems. The challenge will be for companies to meet these requirements while still offering competitive pricing.
According to new recent research by Frost & Sullivan (www.frost.com), U.S. Hot Water Heating Equipment Markets, the total market rose from $1.94 billion in 1998 to $1.99 billion in 1999. The growth rate is expected to remain steady through 2006.
"Despite the strain on some markets caused by governmental regulations, new opportunities are emerging," says Frost & Sullivan analyst David L. Bell. "The market for tankless water heaters is virtually untapped and offers the possibility for substantial growth."
These "instantaneous" or "on demand" water heaters begin to heat water only when the hot water faucet is turned on, therefore saving on fuel consumption, an option not available with standard tank models. Tankless heaters have already had great success in Europe and Asia, and show promise in the U.S.
Ultimately, companies that can distinguish their products from those of their competitors will succeed in this increasingly tight field. Firms will need to pay closer attention to their customers' needs, forcing the development of more unique and noticeable products. As the market continues to grow, warranties support, deliverability, and ease of maintenance will define market winners.
"Many companies are also using price as a differentiating factor," says Bell. "Manufacturers should seek technology and materials that will allow them to price their products reasonably, while at the same time maintaining profit margins."
This Frost & Sullivan report analyzes the primary segments in residential and commercial hot water heating equipment markets, including segments for gas-fired, electric, boiler and instantaneous/tankless heating equipment. It discusses market drivers and restraints and assesses the impact of environmental issues on the marketplace.
Frost & Sullivan presents 2000 Market Engineering Awards to companies that have worked hard to make a positive contribution to the hot water heating equipment industry. The 2000 Frost & Sullivan Market Engineering Leadership Award and the Product Line Strategy Award are presented to Rheem Manufacturing Company. The Product Differentiation Innovation Award is awarded to A.O. Smith (NYSE: AOS).
Market participants include American Standard Water Heater Corp.; American Water Heater Co.; A.O. Smith Water Products Co.; Atwood Center; Bock Corp.; Braford White Corp.; Cemline Corp.; Colombia Boiler Co.; Controlled Energy Corp.; Eemax, Inc.; Lochinvar Corp.; Marley Heater Corp.; Parker Boiler Co.; Peerless Heater Co.; Raypak, Inc.; Rheem Manufacturing Co.; SouthCorp USA, Inc.; State Industries, Inc.; Stillman Heating Products; and Weil-McLain (a United Dominion Company).
Associations include the Gas Appliance Manufacturers Association and the Hydronics Institute, a Division of Gas Appliance Manufacturers Association.
Frost & Sullivan, which is headquartered in San Jose, CA, is a global leader in international market consulting and training. Frost & Sullivan monitors the HVAC/Building Controls industry for market trends, market measurements and strategies. This ongoing research is used to complement the HVAC/Building Controls Custom Subscription. Free executive summaries of both reports are available to the press.
Along with publishing in-depth market consulting reports, Frost & Sullivan also provides custom consulting needs to variety of national and international companies.
Research Publication: 7277-19 - U.S. Hot Water Heating Equipment Markets
Publication Date: May 2000
