After rapid growth of last year, the production and sales of growing refrigerator compressor drops apparently in the first half of 2017. According to ChinaIOL, the production of refrigerator compressor is 75,837,000 units in the first half, up by 9.8 percent year-on-year. The sale of it is 76,621,000 units, up by 9.5 percent year-on-year. The inventory drops by 10.6 percent by the end of June.
The implementation of “New Energy Efficiency” policy makes every brand become more cautious about their inventory. The product continues to upgrade. And “basing sales on production” becomes the mainstream. Due to the rise of the price of raw material and uncertainty of the market, the shipment of refrigerator compressor grows apparently in the first quarter. With the situation of the demand of refrigerator becomes clear in the second quarter, the domestic demand is suppressed, and growth drops.
The characteristics of refrigerator compressor market in the first half can be concluded into the following three parts:
1. Refrigerator market is unclear, and domestic demand shrinks.
The production of refrigerator comes to peak season from March to July. During the first half of this year, the production of refrigerator amounts to 39,106,000 units and grows by 1 percent year-on-year, almost remaining the same with last year. The life cycle of refrigerator is quite long but the upgrade is relatively slow. The reason why it remains the same with last year is mainly because the drive of export. However, the domestic sale drops in a double-digit. Freezer market is almost the same but a bit better than refrigerator market. The production of freezer amounts to 12,388,000 units, up by 6.85 percent year-on-year. Brand centralization continues to enhance.
From the downstream demand of refrigerator and freezer we can see that the domestic demand of refrigerator compressor is on a slight increase. Each brand competes fiercely but current supply condition of refrigerator compressor nearly stabilizes on the whole. And there would be no big changes.
2. Ride on “One Belt One Road” express, exploit overseas market
The overseas market of China’s refrigerator compressor continues to grow except for 2008. In the first half of 2017, the export of refrigerator compressor amounts to 26,711,000 units, up by 16 percent year-on-year.
As for company, every big company maintains a good state of export. Others all increase somehow except for Panasonic and Highly.
As for export area in the first half, the first three are India, Turkey and Indonesia. Among the first thirty countries, the growing rate of Jiaxibera is the biggest because it opens Canada market. Next are Vietnam and South Korea. They all grow a lot mainly because LG’s China-produced compressors are exported to South Korea and exploit Vietnam market as well. In addition, Jiaxibera’s market share in South Korea improves, and Samsung also invests largely in Vietnam market.
Refrigerator compressor succeeds in exploiting overseas market is not only based on good quality but aid and support of related policies. Meanwhile, low price is also a main factor to open overseas market.
3. The upgrade of product accelerates
With the implementation of “New Energy Efficiency”, domestic demand of inverter refrigerator compressor grows day by day, and its proportion continues to increase. Traditional refrigerator compressors are more or less the same, and distribution of brand is relatively concentrated. Therefore, companies must optimize the structure of product besides “price war”. The domestic demand for inverter compressor increased by 70 percent in the first half, and export is up by 27 percent.
As for whole machine company, the sale of inverter refrigerator is 4,602,000 units this year, up by 43.6 percent year-on-year. Refrigerator manufacturer’s demand for inverter compressor is the most, especially Haier. The domestic sale of Haier’s inverter refrigerator ranks first in this industry, increasing by twice in the first half. And followed by Hisense Kelon, due to its lower domestic sale base number, it increases by more than twice.
The growing trend of inverter compressor’s export is less apparent than its domestic sale, but it is in a steady progress. The main export companies are Samsung, LG, Embraco, Panasonic, Jiaxibera and Wanbao.
Export of refrigerator compressor is clear in the first half. Will there be any surprise in the second half?
In the second half of this year, factors that have weakened economy will increase. Meanwhile, investment in infrastructure and real estates will continue to recede, and the cycle of increasing inventory is coming to an end. The recovery of overseas developed countries is still relatively slow, and America’s exchange rate and trade policy against China is still unclear. China’s export is still uncertain.
There will not be big change in China’s refrigerator and freezer in the second half of this year, correspondingly, the domestic demand for refrigerator compressor is expected to increase in slight. According to first half’s data, relatively stable export countries are 65. Compared with last year, there are approximately 10 newly exploited countries. It is expected that there will not big change in export area if nothing particular happened. There will not be big increase in export volume in the second half.