“Even if there is a new round of policy dividends such as the energy subsidies, the entire home appliance industry in the second half of 2012 will not be optimistic. However, after nearly a year of adjustment, it is unlikely that the home appliance industry will continue to deteriorate.†Hisense Kelon Gan Yonghe, the president, told this reporter on July 23.
Faced with the economic situation of “broken 8†for the first time since the second quarter of GDP growth in 11 quarters, even the most optimistic appliance industry executives have been very cautious, and the energy-saving subsidy policy of 26.5 billion yuan had been hoped for by the industry from June. The pulling effect on the domestic demand of the household appliance industry since the implementation began on the 1st has not yet been reflected.
In the first month of implementation of energy-saving subsidies (June 2012), monthly data released by TCL Multimedia, Skyworth Digital, etc. showed that the growth rate had a significant decline from the previous five months. Although the white goods industry that has continued negative growth since last October has resumed positive growth, according to Gan Yonghe, the recovery of the white electricity industry is not directly related to energy-saving subsidies.
What makes the home appliance industry feel depressed is that the introduction of energy-saving subsidies has put pressure on the inventory clean-up of its previous low energy efficiency products. The false propaganda and low-price sales of individual companies through energy-saving subsidies have caused the industry to fall into the “deception†wave.
For the home appliances industry that bid farewell to high-speed growth for many consecutive years, it is obviously still faced with tremendous pressure in the second half of 2012. This includes the overcapacity caused by insufficient market demand, as well as the continuous rise in marketing, R&D, and labor costs.
Energy-saving subsidies "cold"
After the policy of home appliances going to the countryside, one of the important means of boosting domestic demand by the home appliance industry is the "energy-saving subsidies" policy.
However, according to data from the June 2012 statistical report of market research agency Ovey Consulting's recently launched platform, the energy saving subsidy policy in June only boosted the sales of refrigerators, washing machines, and air conditioners by 1.5%, 1.7%, and 2.5%, respectively.
In this regard, a vice president of an air conditioner company told the reporter, “In fact, the relationship between the growth of refrigerators and air conditioners and entering the sales season is more direct. After all, at the end of May, the introduction of the implementation rules of energy subsidies, although many companies’ products won the bid, The process from winning the bid to the official listing requires a very complicated procedure, and most of the energy-saving subsidies are still not listed at the end of June."
In the first half of the year, the growth rate of the color TV industry, which maintained an industry growth of 11%, even fell in June. TCL Group’s June data just announced showed that its flat-panel TV growth rate in June dropped to 11.54%, compared with the first 5 months. The average increase has also reached about 70%.
Obviously, energy-saving subsidies have not yet played a role in the household appliance industry. In fact, in the early days of the launch of the energy-saving subsidies, there was continuous doubt in the industry, and some believed that this was a move by the government to use non-market means to stimulate domestic demand. Some corporate executives even pointed out directly that the government’s policy of stimulating domestic demand, such as home appliances to the countryside and trade-in for new products, had already overdrawn the market demand in 2008. In the next three years, the market demand for the home appliance industry has actually become a rigid demand. Simple policy subsidies It's hard to pull.
Nowadays, energy saving subsidies are not expected to advance and have already confirmed some of the industry’s previous forecasts. The reporter learned that most of the five categories of household appliances that were included in the energy-saving subsidy were previously listed as high-end products by home appliance companies. Their original selling prices were generally high and the sales scale was small. The maximum amount of energy subsidies this time is 500-700 yuan, which is not attractive to the purchase of these high-end products.
Gan Yonghe even pointed out that “when the overall market demand is difficult to improve, the previous large-scale price reductions of manufacturers and retailers are far more energy-saving subsidies, and it is difficult to drive market demand to pick up. Energy-saving subsidies are a natural result of cold. Now that real estate is hard to be optimistic and the A-share capital market continues to decline, it is inevitable that domestic demand will be hard to pull.
Multiple pressures in the home appliance industry
Even so, the recovery of real estate prices in some cities since May, and the gradual advancement of energy-saving subsidies after August, made the home appliance industry make predictions that sales may recover in the second half of the year. However, our reporter found this optimism in the interview. The prediction is not what most people think.
The aforementioned executives of air-conditioning companies told this reporter that “the overall GDP growth rate in the second quarter has broken through 8. Although the situation in the second half of the year may not continue to deteriorate, it is too early to talk about V-shaped or U-shaped reversals, at least in the home appliance industry. Market demand is also under pressure."
Gan Yonghe pointed out that “at least in the second half of 2012, the domestic appliance industry is still facing the dual pressures of the domestic demand market and the difficulty of breaking through the overseas market. The only good news is that in the context of the sovereign debt crisis in Europe and the United States, including The cost pressure on raw materials such as petroleum, steel, and copper and aluminum decreased, while the prices of household electrical appliance end products rose steadily. This has contributed to the improvement of gross profit margins for enterprises.â€
However, raw materials are just one of the many costs of household appliances. The increase in marketing costs caused by channel upgrades and the continued rise in R&D, administrative, and labor costs have all become new burdens for home appliance companies.
Take Skyworth Digital, which has just announced fiscal year 2011 (April 2011 - March 2012) as an example, in fiscal year 2011, its sales expenses including brand promotion and marketing, mall management fees, sales and marketing-related salaries, etc. An increase of 32.1% year-on-year to HK$3.771 billion, while administrative expenses increased by 30.2% to HK$906 million, of which research and development expenses and technical consulting expenses increased by 48% and 43.9%, respectively, while the number of domestic employees increased, the minimum wage rose and performance With the increase in related bonuses, wage and welfare costs have also increased by 18%.
Sun Dongwen, president of Skyworth Group, stated that “by the end of 2015, the average salary of Skyworth employees will probably have nearly doubled. It is apparent that this has replaced raw materials as the largest cost factor in the home appliance industry. The home appliance industry must think of ways to resolve this pressure.â€
For the home appliance industry, it also faces a severe pressure, that is, a new round of capacity expansion with the national 4 trillion investment plan after the 2008 financial crisis.
Nowadays, in the case of sluggish or even negative growth in market demand, the crisis of overcapacity is becoming increasingly serious. Although the domestic air-conditioning industry used to cut inventory and clean up inventory in the first half of the year, its industrial and channel inventory still exceeded 20 million units, while capacity utilization rate Dropped below 70%, this obviously caused a serious investment waste.
Faced with the economic situation of “broken 8†for the first time since the second quarter of GDP growth in 11 quarters, even the most optimistic appliance industry executives have been very cautious, and the energy-saving subsidy policy of 26.5 billion yuan had been hoped for by the industry from June. The pulling effect on the domestic demand of the household appliance industry since the implementation began on the 1st has not yet been reflected.
In the first month of implementation of energy-saving subsidies (June 2012), monthly data released by TCL Multimedia, Skyworth Digital, etc. showed that the growth rate had a significant decline from the previous five months. Although the white goods industry that has continued negative growth since last October has resumed positive growth, according to Gan Yonghe, the recovery of the white electricity industry is not directly related to energy-saving subsidies.
What makes the home appliance industry feel depressed is that the introduction of energy-saving subsidies has put pressure on the inventory clean-up of its previous low energy efficiency products. The false propaganda and low-price sales of individual companies through energy-saving subsidies have caused the industry to fall into the “deception†wave.
For the home appliances industry that bid farewell to high-speed growth for many consecutive years, it is obviously still faced with tremendous pressure in the second half of 2012. This includes the overcapacity caused by insufficient market demand, as well as the continuous rise in marketing, R&D, and labor costs.
Energy-saving subsidies "cold"
After the policy of home appliances going to the countryside, one of the important means of boosting domestic demand by the home appliance industry is the "energy-saving subsidies" policy.
However, according to data from the June 2012 statistical report of market research agency Ovey Consulting's recently launched platform, the energy saving subsidy policy in June only boosted the sales of refrigerators, washing machines, and air conditioners by 1.5%, 1.7%, and 2.5%, respectively.
In this regard, a vice president of an air conditioner company told the reporter, “In fact, the relationship between the growth of refrigerators and air conditioners and entering the sales season is more direct. After all, at the end of May, the introduction of the implementation rules of energy subsidies, although many companies’ products won the bid, The process from winning the bid to the official listing requires a very complicated procedure, and most of the energy-saving subsidies are still not listed at the end of June."
In the first half of the year, the growth rate of the color TV industry, which maintained an industry growth of 11%, even fell in June. TCL Group’s June data just announced showed that its flat-panel TV growth rate in June dropped to 11.54%, compared with the first 5 months. The average increase has also reached about 70%.
Obviously, energy-saving subsidies have not yet played a role in the household appliance industry. In fact, in the early days of the launch of the energy-saving subsidies, there was continuous doubt in the industry, and some believed that this was a move by the government to use non-market means to stimulate domestic demand. Some corporate executives even pointed out directly that the government’s policy of stimulating domestic demand, such as home appliances to the countryside and trade-in for new products, had already overdrawn the market demand in 2008. In the next three years, the market demand for the home appliance industry has actually become a rigid demand. Simple policy subsidies It's hard to pull.
Nowadays, energy saving subsidies are not expected to advance and have already confirmed some of the industry’s previous forecasts. The reporter learned that most of the five categories of household appliances that were included in the energy-saving subsidy were previously listed as high-end products by home appliance companies. Their original selling prices were generally high and the sales scale was small. The maximum amount of energy subsidies this time is 500-700 yuan, which is not attractive to the purchase of these high-end products.
Gan Yonghe even pointed out that “when the overall market demand is difficult to improve, the previous large-scale price reductions of manufacturers and retailers are far more energy-saving subsidies, and it is difficult to drive market demand to pick up. Energy-saving subsidies are a natural result of cold. Now that real estate is hard to be optimistic and the A-share capital market continues to decline, it is inevitable that domestic demand will be hard to pull.
Multiple pressures in the home appliance industry
Even so, the recovery of real estate prices in some cities since May, and the gradual advancement of energy-saving subsidies after August, made the home appliance industry make predictions that sales may recover in the second half of the year. However, our reporter found this optimism in the interview. The prediction is not what most people think.
The aforementioned executives of air-conditioning companies told this reporter that “the overall GDP growth rate in the second quarter has broken through 8. Although the situation in the second half of the year may not continue to deteriorate, it is too early to talk about V-shaped or U-shaped reversals, at least in the home appliance industry. Market demand is also under pressure."
Gan Yonghe pointed out that “at least in the second half of 2012, the domestic appliance industry is still facing the dual pressures of the domestic demand market and the difficulty of breaking through the overseas market. The only good news is that in the context of the sovereign debt crisis in Europe and the United States, including The cost pressure on raw materials such as petroleum, steel, and copper and aluminum decreased, while the prices of household electrical appliance end products rose steadily. This has contributed to the improvement of gross profit margins for enterprises.â€
However, raw materials are just one of the many costs of household appliances. The increase in marketing costs caused by channel upgrades and the continued rise in R&D, administrative, and labor costs have all become new burdens for home appliance companies.
Take Skyworth Digital, which has just announced fiscal year 2011 (April 2011 - March 2012) as an example, in fiscal year 2011, its sales expenses including brand promotion and marketing, mall management fees, sales and marketing-related salaries, etc. An increase of 32.1% year-on-year to HK$3.771 billion, while administrative expenses increased by 30.2% to HK$906 million, of which research and development expenses and technical consulting expenses increased by 48% and 43.9%, respectively, while the number of domestic employees increased, the minimum wage rose and performance With the increase in related bonuses, wage and welfare costs have also increased by 18%.
Sun Dongwen, president of Skyworth Group, stated that “by the end of 2015, the average salary of Skyworth employees will probably have nearly doubled. It is apparent that this has replaced raw materials as the largest cost factor in the home appliance industry. The home appliance industry must think of ways to resolve this pressure.â€
For the home appliance industry, it also faces a severe pressure, that is, a new round of capacity expansion with the national 4 trillion investment plan after the 2008 financial crisis.
Nowadays, in the case of sluggish or even negative growth in market demand, the crisis of overcapacity is becoming increasingly serious. Although the domestic air-conditioning industry used to cut inventory and clean up inventory in the first half of the year, its industrial and channel inventory still exceeded 20 million units, while capacity utilization rate Dropped below 70%, this obviously caused a serious investment waste.
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