The 12th Five-Year Plan of Appliance Industry Recently Announced a 40% Increase in Production Targets

The reporter recently learned from authoritative sources that the “12th Five-Year Plan for Development of China's Household Appliance Industry” (hereinafter referred to as “Planning”) has been finalized and submitted to the Ministry of Industry and Information, which is planned to be announced in the near future. After the revision, by the end of the “Twelfth Five-Year Plan”, the total output value of China’s household electrical appliances industry has been increased from the original RMB 1.1 trillion to RMB 1.5 trillion, which has been raised by nearly 40%, with an average annual growth rate of 9.2%; From the original 50 billion US dollars to 60 billion US dollars, the proportion of the global export market will reach 35%.

The increase in output value indicates that while the two policy dividends of “Home Appliances to the Countryside” and “Old-for-new” will expire at the end of the year, the long-term development prospects of the industry are still good. In the field of white goods, Haier, Midea, Gree, Hisense Kelon, Galanz and other five groups have achieved more than one-third of the market share and will continue to benefit from the increase in industry scale.

Policy dividend is about to expire

With the implementation of the "air-conditioning energy-saving subsidies for the benefit of the people" that was implemented by the state for two years, the cancellation of the dividends of the home appliance industry policy is expected to gradually increase. The reporter recently learned from authoritative sources that the two stimulus policies of “Home Appliances to the Countryside” and “Old-for-new” will expire at the end of the year and are unlikely to be postponed again. According to the source, whether the “home appliances going to the countryside” or “replacement of old ones” is a special period of the economic crisis, the state’s phased policy to promote domestic demand will end in line with expectations as the situation changes.

In fact, the deadline for the air-conditioning energy-saving benefits subsidy policy that was launched in June 2009 was originally set to expire in June 2010. After the expiry of the air-conditioning energy-saving subsidies, it was extended by another year. The "home appliances to the countryside" and "trade for the old" also experienced the process from pilot to promotion.

Taking "replacement of old for trade" as an example, since June 1, 2009, China has started trials of home appliances replacement in nine provinces and cities, including Beijing, Tianjin and Shanghai. On June 3 of the following year, the Ministry of Commerce, the Ministry of Finance, and the Ministry of Environmental Protection jointly convened a national “replacement for old” work conference on home appliances. The meeting announced that since June 1, 2010, the “new-for-new” policy on home appliances was gradually extended to the entire country. The time is tentatively scheduled for December 31, 2011.

According to the latest statistics released by the Ministry of Commerce, as of July 28, 2011, sales of home appliances for trade-in replacement exceeded 60 million units, reaching 60.116 million units, sales of 222.96 billion yuan, and recycling of 91.213 million old appliances. Among the five major categories of home appliances “replacement for new products”, TV sales were 19.918 million units, accounting for 32.8% of total sales; air-conditioning sales were 15.842 million units, accounting for 26.4% of total sales; computer sales were 9.05 million units, accounting for 15 of the total sales. %; Refrigerator sales 8.204 million units, accounting for 13.6% of total sales; washing machine sales 7.322 million units, accounting for 12.2% of total sales. Air-conditioning, ice-washing and other mainstream white goods accounted for half of the total sales.

At the same time, the sales growth of "Home Appliances to the Countryside" in July hit a record high since April this year. According to statistics, in July, a total of 7.51 million units of “home appliances to the countryside” were sold, and sales amounted to 19.97 billion yuan, an increase of 11.8% and 25.3% year-on-year respectively. In terms of product categories, sales of refrigerators and air conditioners reached 6.9 billion yuan and 4.2 billion yuan. From the perspective of enterprises, Haier Group, Midea Group and Hisense Group are still among the top three sales.

Leading companies have stable performance

As Jiang Feng, chairman of the China Household Electrical Appliances Association, said, the "Home Appliances to the Countryside" policy has played a positive role in the Chinese home appliance industry in responding to the financial crisis and stimulating demand in the rural market. “Home Appliances Going to the Countryside” has promoted the construction of the rural circulation system, initially shaped the rural sales channel and after-sales service system, and improved the consumer awareness of rural consumers. The spontaneous growth of the market has been formed. Through the “Home Appliances Going to the Countryside” policy, the scale of home appliance consumption in the rural market has expanded rapidly. For a long time, the rural market has been weak and the proportion has been low. The rural market has really risen to an important market alongside the urban market and export market.

According to the “Home Appliances to the Countryside” implementation plan, the “Home Appliances Going to the Countryside” policy of the first batch of pilot regions in Shandong, Henan, Sichuan, and Qingdao will expire in November this year. In addition, the deadline set by the Ministry of Commerce for the "replacement of old appliances" policy is tentatively scheduled for December 31, 2011.

Today, many companies have prepared for the termination of the policy dividend. According to Huang Tonghua, a spokesman for Chigo Air-Conditioning, the policy is only icing on the cake and it will not be possible to support the development of the company in the long term. "Home Appliances to the Countryside" has played a great role in fostering rural consumption habits. Enterprises should seize the demand for upgrading their home appliances to expand market space.

Wang Jinliang, Vice President of the China Refrigeration Appliance Group's China Business Division, revealed that in the first seven months of this year, sales of American air conditioners in the rural market have increased by nearly 70%, among which rural residents' acceptance of inverter air conditioners exceeds imagination. He believes that after the suspension of fixed-speed air-conditioning subsidies, the difference with the inverter air-conditioning has been small, which will help further expand the share of inverter air-conditioning in the rural market.

Xu Dongsheng, deputy secretary-general of the China Household Electrical Appliances Association, told reporters that even if the expected end of the policy is fulfilled, it may only cause short-term effects for the company for three to six months, and the long-term trend of household electrical appliance industry growth will not change. In the crucial period of policy change, the industry leaders will be affected earlier because of their relatively early preparations, and they may have some impact on SMEs.

Huang Tonghua also said that in fact, Chigo air conditioning has been prepared a year ago, the product layout is more inclined to structural adjustment and technology upgrade of the high-end market. “Technical innovation has become the first factor in determining the survival of an enterprise whether it is export or domestic sales,” he pointed out.

The "12th Five-Year" output target has been raised by nearly 40%

Authoritative sources revealed that the “12th Five-Year Plan for Development of the Chinese Household Appliance Industry” will be expected to be announced in the near future. Compared with the draft, “Planning” has recently raised the output value target of home appliances (mainly white goods and small household appliances) at the end of the “Twelfth Five-Year Plan” period, from the original set of 1.1 trillion yuan to 1.5 trillion yuan, up nearly 40%. The average annual growth rate is 9.2%.

Jiang Feng, chairman of the China Household Electrical Appliances Association, pointed out that China is the world's largest home appliance manufacturing base. Last year, the total output value of the white electricity industry was 960 billion yuan, which was even greater than that of black power. According to informed sources, as of the end of 2009, the total output value of China's white electricity industry has reached about 7,000 yuan. According to this industry growth rate, the initial draft of the original target of 1.1 trillion will be completed within the fastest time this year, and is obviously more conservative. This is also the original intention of the "planning" for the adjustment of the output value target.

In addition, this revision has also made adjustments to the export target. The export target has been increased from the original 50 billion U.S. dollars to 60 billion U.S. dollars, and the share of the global export market will reach 35%.

According to statistics, in 2009, there were five home appliance enterprise groups with sales revenue of over 10 billion yuan, of which one had over one hundred billion yuan. The sales revenue of Haier, Midea, Gree, Hisense Kelon and Galanz totaled more than 240 billion yuan, accounting for more than one-third of the entire industry's operating revenue, and will continue to benefit from the increase in industry scale.

"But it is worth noting that the overall goal of shifting the focus from the 'big home appliance country' to 'powerful home appliance country' in the next decade has not changed, so emphasizing that core technologies such as energy saving are more important to companies," the source said. According to reports, "planning" also has specific requirements for energy-saving emission reduction, core technologies, key components and other mission indicators. For example, given that the maturity of technology and the market will help to increase the market share of industrial products such as inverter air conditioners, the “planning” has increased the proportion of inverter air conditioners from the original 30% to 50%.

Nowadays, Chigo Air Conditioning has laid out a complete range of frequency conversion products; Gree is also actively developing new business growth points such as central air conditioning, special air conditioning, medical temperature control, and refrigeration. Han Jianhua, secretary-general of the Shanghai Jiaotong Household Electrical Appliance Trade Association, told reporters that pursuing the development of technology-led industries based on the theme of energy conservation is of great significance to both domestic demand and exports.

According to Jiang Feng, China Household Electrical Appliances Association has listed the development of home appliance industry technology roadmap as this year's work plan, initially considering the development of an overall industrial technology roadmap for the household appliance industry, and subdividing refrigerators, air conditioners and washing machines into three sub-product technical routes. Illustration.