Starting in the second quarter of this year, the global economy has gradually returned to a normal growth curve, and the development trend of China's air conditioning industry also shows this characteristic. In April, production and sales narrowed year-on-year and month-on-month, and a slight decline occurred in May. The latest monthly report on production and sales released by Industry Online shows that in May 2021, the total production of household air conditioners was 15.461 million units, a year-on-year decrease of 4.0%, and the total shipment volume was 15.884 million units, a year-on-year decrease of 3.3%, with domestic sales down 14.5% and exports up 15.5%. The industry trend has reached a turning point, with the decline mainly coming from domestic sales.
The main reason for the decline in domestic sales is the transmission from the retail end. This sign has been more obvious since mid-to-late April, with retail sales declining by more than 20% in May. Affected by this, industry confidence has been hit, and factory production and shipments have also declined significantly. In addition, raw material prices continue to rise and remain high, and the increase in costs has made enterprises more cautious in procurement. Although the government has introduced the latest regulatory policies, bulk prices have moderately rebounded in the short term, but bulk products are "externally dependent at both ends," and the room for significant rebounds is limited, and it remains to be seen.
According to Industry Online's market visits in May, due to weak consumption and high costs, price increases for air conditioning products have not been smooth, and currently, enterprises are facing great pressure in terms of shipment retail and operation. Among regional markets, only South China has performed relatively well this year, while other regions have generally performed poorly due to weather conditions, but the repeated epidemic situation in South China in late May has also affected production and consumption to some extent. Since June last year was still a high base, Industry Online predicts that the domestic market will continue its downward trend.
In addition, due to rising costs and greater pressure on profitability, there was no large-scale price reduction in the domestic air conditioning market during the "May Day" and "5.20" periods this year. From a brand perspective, May is also a key node for stocking up for the 618 big promotion. Each company has used different methods, but the biggest difference this year is that overall price competition is more rational, focusing on promotional activities. Taking Aux as an example, during the 618 National Carnival, Aux achieved online and offline integration, combining online live broadcasts with offline activities to strongly launch the "AUX Trendy China Style" national trend carnival night. Through diversified marketing scenarios and trendy and innovative gameplay, it leads a new trend of 618 shopping.
The export market has performed well this year, with continued expansion of demand in Europe and America. In May, exports increased by 15.5% year-on-year, and increased by 15.7% from January to May. Although sales are increasing, price increase negotiations are exceptionally difficult, and customers are not accepting them. Currently, the price increase for air conditioner exports is around 10%, but the cost increase is about 20%. Air conditioners are a category with a relatively small and slow price increase among overall white goods exports, and it is not yet apparent in the short term to achieve price increases through product structure adjustments. Currently, companies are cautious about overseas orders, coupled with soaring logistics costs, which will also affect overseas demand.
