According to iSuppli, the export volume of China's major household appliances is expected to decrease by 2.7% in 2009 due to the decline in exports caused by the global economic depression. The total shipment of China's major household appliances in 2009 is expected to be 177.5 million units, less than 182.4 million units in 2008. The total shipment volume represents the market trend of major household appliances such as air conditioners, washing machines, refrigerators and microwave ovens.
The export volume will decrease by 8.5% over 2008, from 108.3 million units to 99.1 million units.
China's domestic market will continue to grow despite the global economic slowdown due to the government's subsidy measures. China's Ministry of Finance has expanded a stimulus plan to reduce the price of household appliances purchased by rural consumers by 13%. This measure has enabled the domestic market to maintain a fairly rapid growth pace, although not as strong as in previous years.
China's large domestic equipment manufacturers control the main home appliance market. These enterprises are implementing product differentiation strategies in the domestic market, and they are taking the lead in the export market with cost. It is a major challenge for manufacturers to design major household appliances with new features that can attract consumers.
These enterprises are adopting vertical integration strategies to control key components and equipment and help reduce production costs. Many enterprises have begun to outsource low-end products to contract manufacturers. In order to improve the utilization rate of equipment, major home appliance suppliers are unwilling to expand their production capacity.
Due to the general lack of innovative and diversified products in the non variable frequency air conditioning market, major air conditioning enterprises in China are developing products using variable frequency technology.
Due to the high price, it is expected that China's variable frequency air conditioning market will only grow moderately from 2009 to 2010. Chinese local enterprises are still weak in product design and market development of variable frequency air conditioners. Chip suppliers need to provide an overall solution for controlling variable speed motors. The key chip used in major household appliances, the microcontroller (MCU), is controlled by Japanese suppliers. By establishing close partnership with Chinese * * household appliance enterprises, Japanese suppliers have gained a controlling position in the MCU field. Air conditioning is still an important market for suppliers of semiconductors to CEE. Therefore, the development of the aviation industry should also be greater, so as to better drive the whole market.
