The impact of falling exports, China home appliance market shipments fell

According to iSuppli, China's exports of major home appliances are expected to fall 2.7 percent in 2009 as the global economic downturn weakens exports. Total shipments of major appliances in China are expected to be 177.5 million units in 2009, down from 182.4 million units in 2008. Aggregate shipments represent market trends for major appliances such as air conditioners,
Thanks to government subsidies, China's domestic market will continue to grow despite the global slowdown. China's finance ministry expanded a stimulus program that cut the price rural consumers pay for more appliances by 13 percent. This has kept the domestic market growing at a fairly fast pace, though not as strongly as in previous years.
China's big domestic equipment makers control the main home appliance market. These companies are implementing product differentiation strategies in the domestic market and cost management in the export market. Designing major appliances with new features that appeal to consumers is a major challenge for manufacturers.
These companies are adopting vertical integration strategies to control key components and equipment and help reduce production costs. Many companies have started to outsource low-end products to contract manufacturers. Major appliance suppliers are reluctant to expand capacity to improve equipment utilization.
Due to the general lack of innovative and diversified products in the non-variable frequency air conditioning market, the major air conditioning enterprises in China are developing products using variable frequency technology.
Due to higher prices, China's variable frequency air conditioning market is expected to grow only modestly in 2009-2010. Local enterprises in China are still weak in product design and market development of variable frequency air conditioners. Chip vendors need to provide an overall solution for controlling variable speed motors. Microcontroller (MCU), the key chip used in major home appliances, is controlled by Japanese suppliers. Japanese suppliers have gained control of the MCU sector through close partnerships with Chinese appliance companies. Air conditioners are still an important market for suppliers of semiconductors to everyone's electronics companies. Therefore, the development of the aviation industry should be larger, so as to better drive the whole market.