Air-Conditioning Exports Fall for Five Consecutive Companies Relying on Breakout of High-End Products

In 2011, the days of air-conditioning companies have not been much better. In the first half of last year, the prices of copper and plastics, the main raw materials for air-conditioning, have been at high levels, coupled with rising logistics and labor costs. The European debt crisis in the second half of the year raised the unemployment rate in many European countries. The expected reduction in air-conditioning consumption capacity also suppressed the willingness of European air-conditioning buyers to purchase. Buyers substantially reduced the Canton Fair compared to the first half of the year. The US dollar market continued to weaken and the RMB appreciated. Affected the profitability of manufacturers and in turn led to a decline in the willingness of some companies to export. The impact of the termination of stimulus policies such as subsidy policies, trade-in replacement, and so on began to show a more obvious downward trend.

Although China's air-conditioning market has been underpinned by multiple factors such as rigid demand, policy stimulus, and product replacement, the overall growth trend has been maintained, and the numerous domestic and foreign markets hindered the lucrative air-conditioning industry from becoming much worse. Statistics show that by the end of 2011, the air-conditioning industry has experienced negative growth for six consecutive months. Since the cold year began in 2012, it has been five months, but air-conditioning export volume has dropped by 15.8% year-on-year and has experienced a “five losing streak”. In the past New Year's Day and Spring Festival, sales of air-conditioning companies failed to achieve significant growth.

Luo Qingqi, an expert in the home appliance industry, believes that after the withdrawal of stimulus policies, weak sales of home appliances have become a reality. In the face of a “deep recession” in the external economy, it is necessary to rely on new subsidy policies to stimulate domestic demand, but if a company places its hope entirely on the policy, Instead of considering how to survive in a harsh environment, the vitality will not last long.

At the same time as market sales fell, inventory became a major problem that air-conditioning companies had to face. According to the industry online data, as of the end of December 2011, domestic air-conditioning companies had an inventory of 11.98 million units, surpassing the historical high of 11.74 million units in 2008 under the impact of the financial crisis. If coupled with the inventory of national businesses, at the beginning of 2012, the domestic air-conditioning industry will face an inventory pressure of 20 million units. Among them, the inventory of the three air-conditioning companies in the United States, Gree, and LG accounted for more than 70% of the total inventory market.

The demand for high-end personalized products has become a breakthrough point in the market. The year 2012 will be the year for the withdrawal of national policies, and the confidence of air conditioner makers is generally insufficient. In fact, in the sluggish market environment of the air conditioning industry, companies urgently need high-end products to open up. As high-end products often symbolize high technology and high added value, they bring greater profits to the company. Insiders pointed out that although the general product sales, but the profit is minimal. In order to maintain market share, some products even lose money. In order to increase profitability, manufacturers continue to introduce new and higher-priced high-end products.

In the sales promotion, the sales are mainly in the mid-range inverter air-conditioner products, and the high-end demand is continuously improved. The frequency conversion products currently sold account for more than 60% of the overall product line. Based on the national requirements for energy-saving emission reduction targets and consumer acceptance, coupled with the country may introduce energy-efficient product subsidies policy, it is expected that in 2012 inverter air conditioners, especially one or two inverter air conditioners will maintain the growth trend, the share will continue to increase.

Recently, major manufacturers such as Midea, Haier, Gree, and Zhixiu have all introduced new frequency conversion products and seized market share. In addition to inverter air conditioners, three-level fixed speed air conditioners are a category that deserves attention. Due to obvious cost advantages, three-level fixed speed air conditioners have become the main models for some manufacturers in 2012. It is expected that the three-level fixed speed air conditioners will have a certain degree in 2012. The market picked up.

At the same time, the debate over PM2.5 last year once again showed the importance of the air environment. Due to the increasingly prominent family pollution problems caused by the decoration materials, there are market opportunities for healthy air conditioning. As many domestic brands, including some joint venture brands, will launch 2012 new products, according to the current development trend of the air conditioning industry, new products will inevitably combine intelligence, frequency conversion, health, energy saving, comfort, convenience and other concepts into one, continuing high-end, energy saving, fashion, Luxury and other trends. In the air-conditioning market in 2012, healthy air conditioners with the functions of “except formaldehyde” and “air purification” represented by Hisense's fully-purified inverter air-conditioner, Chico's antibacterial copper Cu+ inverter air conditioner, and Haier’s formaldehyde inverter air conditioner will become a major highlight.

In terms of price, Suning's "White Paper on Air Conditioning Industry" released last week predicts that prices of air-conditioning products will rise slightly overall in 2012. However, after the introduction of the new consumer subsidy policy in the second quarter, the increase in product prices will narrow and will remain basically the same as last year. Gree air-conditioning vice president Dong Mingzhu also said that in 2012, the prices of steel and aluminum products have all maintained their levels last year. Plastics and copper have risen. Another rare earth that affects the price of inverter compressors is more expensive than in previous years. In general, The price of air-conditioning products will not change much unless there are new technologies. The opportunity for breeding opportunities in China's air-conditioning industry in 2012 is a key year for the transformation and upgrading of air-conditioning manufacturers.