Long-term mechanism for home appliance subsidies is expected to come out

The last consumer-stimulating consumer electronics industry policy, energy-saving Huimin, will end on June 1. This period means that the country’s five-year policy support for the home appliance industry has completely ended. Subsidies are gone, and competitive home appliance companies will rely on their own ability to solve their own problems.

However, just as companies are busy clearing inventory before the end of the policy, the newly promulgated energy efficiency standards for air-conditioning products will undoubtedly add difficulties to home appliance companies.

Long-term mechanism is expected to come out

On May 27, the Ministry of Finance, the National Development and Reform Commission, and the Ministry of Industry and Information Technology jointly issued the "Notice on Stopping the Promotion of Energy Saving Appliance Subsidy Policy." The notice clearly stipulates that from June 1 onwards, consumers will purchase five types of energy-saving household electrical appliances such as air conditioners, flat-panel televisions, refrigerators, washing machines, and water heaters, and will no longer enjoy financial subsidies.

This notice not only puts an end to the implementation of the energy-saving policy for the home appliance industry for one year, but also announces that the national version of the home appliance consumption stimulus policy that has been implemented since 2007 is about to withdraw from the stage of history.

Although the national version of the energy conservation subsidy policy will not be postponed, a noteworthy signal is that the Ministry of Finance in its official website summed up the news of the effectiveness of the energy-saving policy, and stated that the Ministry of Finance and the relevant departments will promote the establishment of A long-term mechanism conducive to the consumption of energy-saving appliances. Some people in the home appliance industry told reporters that it is not ruled out that energy-saving subsidies will be implemented in other ways for a long time.

In early May, the China Household Electrical Appliances Association submitted to the three ministries and commissions a copy of the proposed letter on the exit of the energy-saving and people-friendly policy. The Home Appliances Association stated that the energy-saving subsidies policy allows companies to generate dependency emotions, which is not conducive to the adjustment of product structure according to market conditions.

The recommendations of the Household Appliances Association were supported by white electric companies that were stimulated by policy stimulus. The most representative is that Fang Hongbo, the chairman of Midea Group, explicitly stated to the top officials of the country in April this year that he hopes to introduce less subsidy policies. Otherwise, the company is susceptible to "subsidy dependency syndrome."

However, the home appliance industry's internal attitude toward energy-saving and people-friendly policies is not uniform. In interviews with reporters, the black power companies such as Skyworth and TCL have expressed their hope that the home appliance subsidy policy can continue. Skyworth Group spokesperson Li Congxiang once said that the cost of promoting energy-saving emission reduction and product upgrading is quite high, and subsidy policies can reduce the pressure on business costs.

According to the reporter’s understanding, the black power companies are the big winners of this energy-saving policy. Bai Weimin, vice president of the China Electronics and Video Industry Association, once disclosed that as of the end of February this year, the color TV industry has received more than 9 billion yuan in subsidies, accounting for 1/3 of the 26.5 billion subsidies.

Clean up inventory pressure

In fact, whether it is a “quiet” white-water power company or a black-power company that expects a national policy, before the end of the energy-saving subsidy policy, they all face the arduous task of how to digest existing stocks.

After the first two years of adjustment, the white electricity companies have relatively small inventory pressure. Taking the air-conditioner with the greatest inventory pressure as an example, data from Industry Online shows that in March 2013, the domestic air-conditioning industry had an inventory of 6.4 million units that hit a new low in nearly three years. In 2011, this figure was 16 million units.

Relatively speaking, TV companies that have benefited the most from energy-saving subsidies are facing huge inventory pressure.

The above-mentioned industry sources told reporters that color TV companies generally start mass production of bulk goods and sell them in concentrated seasons. “Now the performance of overseas markets is sluggish, and the exit of domestic energy-saving subsidies will cause black-box companies to face a greater inventory crisis.” According to statistics from Customs, from January to March this year, the volume of color TVs continued to decline, with the rate of decline falling in March. 16.7%.

At the same time, the policy of saving energy and benefiting the people is coming to an end, and the new version of the energy efficiency standard is about to come out. This has also brought about tremendous pressure on household appliances companies to clean up their inventory.

On June 1st, the new air conditioning energy efficiency standard will be implemented. According to report, in the new version of energy efficiency standards, the existing primary and secondary air-conditioning levels will be reduced by one level, adding a level of energy efficiency. The new three-level air-conditioners are not allowed to go on sale.

The above-mentioned industry sources told reporters that after the implementation of the new version of the energy efficiency standard, the entry threshold for air-conditioning was increased. "If you don't sell it quickly, many products can't be sold."

According to sources, the color TV industry and the refrigerator industry also consider the implementation of new energy efficiency standards. Therefore, whether it is the United States, Skyworth and other home appliance companies or Suning, Gome and other channel chain rushed before the June 1 deadline, launched a large-scale promotional activities, hoping to catch the last train of energy-saving Huimin, as soon as possible digestion of energy-saving models of product inventory.

According to data from Zhong Yikang, in the period from May 13 to 19 before the end of the policy, LCD TV sales increased by 150.2% year-on-year, air-conditioner sales increased by 57.4%, washing machine sales increased by 41.4%, and sales in the refrigerator market The growth rate also reached 34%.

However, another unfavorable factor that discouraged home appliance companies from digesting inventory is that after five years of policy stimulus, home appliance companies receive a huge amount of subsidies while getting a market where demand has been severely overdrawn.

The Ministry of Finance, in summarizing the effectiveness of the energy-saving appliance subsidies promotion policy, stated that according to statistics, the monthly sales volume of energy-saving appliances has increased from the 1.6 million units at the start of the policy last June to the current 7 million units per month. One year, the Chinese Communist Party promoted more than 65 million sets of five types of energy-saving appliances and boosted consumer demand by more than 250 billion yuan.

This huge number will undoubtedly hinder the growth of the home appliance market in the second half of the year. In addition, for air-conditioning companies, the weather has also become an important factor hindering the digestion of their inventory. The above-mentioned industry sources told reporters that the weather is getting hotter this year, and most parts of the South have been raining. Air-conditioning is certainly not easy to sell.

Whether price increases test profitability

Digestion of incomplete inventory, companies can not make money. In the absence of state subsidies, whether or not the product will increase its price has become a test of the profitability of home appliance companies.

Liu Buchen, an observer of household appliances, analyzed the reporters. According to past experience, after the energy-saving subsidy policy is over, the price increase of home appliances is unlikely to occur. “But it does not rule out that individual brand prices with strong bargaining power will rise slightly.”

Something that he said has already happened. Zhang Bo, general manager of Gree Beijing Branch, said that after June 1 Gree air-conditioning will increase prices. And said that after the "energy-saving benefits" subsidy policy ended, the original amount of how much is now up.

In fact, under the pressure of cost, home appliance companies must produce high-efficiency products, and price increases are imperative. However, unlike Gree’s public price increase, more companies adopt stealth price increases through new pricing for new products.

Li Congxiang wants to say to the outside that Skyworth will not raise the price, but it is possible to stop production of some models of energy-saving subsidies.

In addition, low-efficiency products with lower production costs will reappear. Han Wei, research director of Alway White Appliance Center, said that after the subsidy stops, the proportion of three-level energy efficiency products in fixed-frequency air-conditioning will rebound to 45 percent.

However, the newly introduced air-conditioning energy efficiency standards of the country have already sounded the alarm for the behavior of home appliances companies to "turn the car on." In this new version of the air-conditioning energy efficiency standards, the air-conditioners below the third-level will not be allowed to go public, which means that the market entry of low-efficiency products will be blocked.

On the one hand, it is a strict market entry standard. On the other hand, it no longer owns the energy subsidies provided by the country. It seems that the market has no strong confidence in the household appliance industry that has lost support for stimulating consumption policies. On May 30th, the home appliance sector closed by green across the board. In addition, China Unicom’s overall forecast for the home appliance market in 2013 only grew by 3.2%.

Regarding the impact of the suspension of the energy-saving subsidies policy on the company, Zuo Yanxi, general manager of Zhongye Kang Brand Center, said that in June and July, the appliance market will usher in a weak phenomenon. The market will be in a period of deep adjustment in the second half of 2013, and the third quarter may return to its low point. Now, perhaps we should worry about how deep the bottom is.