The market for hot water systems is characterized by high sales volumes in all four of the large continental markets: North and South America, Asia and Europe. In 2006, the global market for hot water solutions reached 9.1 billion euros, which was up 2 % on the previous year.
The available systems are distinguished by the type of water delivery (storage and instantaneous systems) and energy types (oil/gas and electric). At 65 % or 6.0 billion euros, storage systems based on oil/gas and electricity hold the biggest share of the market.

Storage systems

Storage systems comprise both individual devices and storage systems connected to heating boilers. A total of just under 40 million storage water heaters worth 6 billion euros were sold worldwide in 2006. The sales volume thus increased by 3 % over the previous year.
While the U.S. remained the single most important market with 10.0 million units sold in 2006, the industry was able to win new customers primarily in the Asian and European markets. In Asia, growth is mainly driven by private households’ high pent-up demand for more convenient hot water solutions.
Simple electric storage water heaters are enjoying growing popularity. In the western European markets, by contrast, storage systems are increasingly used in conjunction with solar thermal systems. The solar boom has given the market for large-volume storage systems a strong boost, especially in France and Germany. With 1.6 million units sold and a 16 % share in the total European market, France remains the single most important market, followed by Germany with 1.4 million units sold. Other big markets include Italy, Russia, Spain and the UK. A total of 10.5 million units were sold in Europe in the past year.

BBT Thermotechnik expects long-term demand for storage water heaters in Europe to remain stable with an average annual growth rate of 2 %. Apart from the development of new markets in eastern Europe, the market will mainly be stimulated by the growing popularity of solar energy for the heating of domestic water and for supplementing the heating system.

Gas water heaters

The global market for gas water heaters remained stable in 2006. At a good 2.2 billion euros, sales revenues were more or less on a par with the previous year, while the sales volume increased by 2 % to 15.3 million units sold.

The two big markets, China and Japan, continued to determine the market development. Both markets are, however, served with very different products. Whereas the Japanese market is dominated by technologically sophisticated high-performance gas water heaters, low-cost heaters are in particularly high demand in the growing Chinese market. In 2006, the Asian region accounted for 74 % of the global market for gas water heaters, followed by Europe with 14 % and the Americas with
9 %. Africa accounted for 3 % of the global sales revenues.

With over 670,000 units sold, Spain dominates the European market, followed by Russia with 580,000 units sold and Portugal with 232,000 units. Thanks to very dynamic growth in 2006, Ukraine has become the fourth biggest market in Europe. In line with growing prosperity, the first-time installation of gas water heaters has become a growing business in both Ukraine and Russia. In Spain and Portugal, by contrast, the replacement business is playing a more important role, with a trend towards combination devices for space and domestic water heating.

The strong growth in the North American market continued in 2006, with gas water heaters gaining in popularity. Compared to the directly heated storage water heaters that dominate the U.S. market, they offer advantages in terms of convenience and energy efficiency. In 2006, over 270,000 gas water heaters were sold in the U.S. market, which represents an increase of 30 % over the previous year.

In view of the increasingly saturated markets, BBT Thermo-
technik expects global sales of gas water heaters to grow at a moderate rate of only 3 % in the coming years.
China and Japan will continue to make Asia the most important output market. While the replacement business will dominate in the saturated Japanese market, first-time demand for gas water heaters is likely to pick up in China in the coming years.
New business growth opportunities will also arise in eastern European markets, especially in Ukraine and Russia, and in North America as well as in India and South America.

Electric instantaneous water heaters

Electric instantaneous water heaters worth almost 1 billion euros were sold worldwide in 2006. Accounting for 36 % of the total market volume, Europe remains the largest output region in terms of value. Asia represents 35 % of the market, while the Americas, which almost exclusively comprises the South American market for electric instantaneous water heaters, account for 29 %.

In 2006, the sales volume rose by almost 3 % over the previous year to 19 million units sold. This increase was mainly attri-
butable to the Asian emerging markets, China and India. Brazil remains the single most important market for electric instan-
taneous water heaters in terms of volume. With 11.8 million units sold in 2006, the country accounted for approx. 62 % of the world market sales volume of instantaneous water heaters for the shower. Other major markets are the UK, India, China and Germany.

BBT Thermotechnik expects the market for electric instan-
taneous water heaters to show stable average growth of 3 % p.a. in the long term. Demand will primarily be stimulated by the Asian market, where electric instantaneous water heaters are mainly used to heat water for the shower, which is also the case in Brazil. An increasingly affluent population in Asia should lead to a further rise in demand.