Household Appliances Industry: Struggling In The Deteriorating Business Environment - Products,
Upstream prices rose in the context of household electrical appliances companies continue to struggle in the deterioration of the business environment
. 2005 annual report, Chunlan listed shares and TCL Group, the first time since the loss, the crisis Aucma into a capital chain, TCL Group andKelon
Electrical appliances were 320 million yuan and 487 million yuan huge loss, Qingdao
Haier
Net profit fell 35.27 percent.
Almost the same time the first quarter 2006, disclosure of quarterly re-alarm, performance year on year decline in home appliances listed companies in Sichuan
Chang
, Chunlan shares, Kelon Electrical, Aucma, Meiling, SVA, Xiamen Overseas Chinese Electronics.
Costs as the greatest heart ache
Almost no one home appliance companies are not complaining about price increases for raw materials. According to Chunlan shares, said last year
Copper
, Aluminum, etc.
Air conditioning
Device main raw material prices record high copper prices in early 2005, 30,000 yuan from the / t has risen to 42,000 by the end of yuan / ton, aluminum from the beginning of 2005 16,600 yuan / ton up to the end of the year 20,000 / ton. 2005 earnings per share of 0.95 yuan remained blue-chip image
Gree
Electric, said the main raw material required for production of air conditioners steel, copper, aluminum, plastic determines the price of air changes in material costs, although
Steel prices
Down in the second half, but copper, aluminum and other raw material prices rise there is relatively large, generally, air conditioner material costs continue to rise has not fundamentally changed.
The face of rising costs, corporate results and further expansion of production capacity weak. Scale production of scale not seen one of the reasons is the market growth rate slowed more prominent contradictions in short supply. According to the U.S. electrical analysis of the global air conditioner manufacturing to developing countries, driven, since 2002, domestic air conditioning industry, high-speed access to explosive growth, average annual growth rate of nearly 50% average annual growth rate of overseas exports more than 60%. Air conditioning industry growth rate in 2004 was still as high as 38%; until 2005, more than 70% of the air conditioners produced in China, and China has become the world's largest air conditioner production base.
However, the domestic air conditioner industry in 2005 into a period of steady growth, industry-wide annual growth rate of only 6%. Slowdown in global demand, while domestic air conditioner manufacturers have launched expansion projects, production capacity continues to expand, the industry's apparent oversupply and slowing in demand and production continue to expand the conflict continued to enlarge. Enterprises that domestic
Real estate
Market regulation, not the hot summer temperatures, further squeezing domestic commercial channels, barriers to increasing overseas operations and other factors, are difficult to make money on the last air conditioners have a negative impact.
Overseas expansion of the bumpy Tan
Development
Overseas markets
Household electrical appliance enterprises are regarded as one response out of the woods. On the one hand, a large number of global home appliance production transfer to China, China's household electrical appliances production of consumer acceptance has been overseas and expand the overseas market with a market-based. On the other hand, China's household electrical appliances have a significant price advantage, and capture market share overseas, repeatedly paid off. Domestic appliance enterprises to expand overseas market ready, for example, Meiling produce 600,000 units last year, the new
Refrigerator
Export base went into operation. The company said the export market in order to consolidate the European market mainly focus on developing the American market, by adjusting the product structure, to improve profitability and high growth driven enterprise development.
Domestic
TV
Rebound in business efficiency, but also has benefited from exports. However, the expansion of overseas markets is not free. Sichuan Changhong has ApexDigitalinc. And three-quarter of the signing of Mr. Long Fen
Trading
Dispute settlement, Apex willing to take the company 170 million U.S. dollars of debt, the parties agreed to suspend all proceedings in the United States. Thus, the Sichuan Changhong to open the U.S. market have paid a heavy price. As of the end of 2005, the company's loan receivable from Apex to 457.6 million U.S. dollars, the cumulative provision for bad debts reached 313.8 million U.S. dollars. TCL Group's international strategy is the integration of hard, arduous task of losses the company to a loss for the first time.
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