China Refrigeration Compressors Market
Refrigeration compressors can be divided into two fields: fridges and air conditioning. After the great investment of the government, the compressor industry enjoys a 100% annual growth. While after the influence of government investment fade away, it will experience a decline period. Then due to the demand of market, it will recover again.
2. Fridge Market
The production capacity now hits 100 million while the demand of the market in 2011 will not surpass 60 million. there are several factors influencing the market.
2.2 Negative factors
- Over-capacity of fridge production expands to compressor industry.
- Main players in compressor industry has finished expansion in 2010.
- The government curbs the property market and causes a dramatic decrease of the turnover of the market.
- “Home appliances to rural areas” policy which overdraws the future demand will end in 3 months
2.3 Positive factors
- The demand in fridge industry will be reasonable and keep rigid. This will lead to the increase of high quality fridge sales.
- In 2011, the government has launched a project of 10 million policy-related houses. It equals to the average annual construction size of the whole country. And at the beginning of 2012, the market will react on its effect.
- In city, each family owns 1.2 fridges averagely while the number in Japan is 2.5. So it means the demand for upgrading and new ones will lure the manufacturers to upgrade their production in both quality and quantity. Needless to say, in rural area, each family owns only 0.5 fridge. So it’s still a potential market.
However, it is weakly possible for the fridge market to skyrocketing like that in 2010 again.
The growth will stay at 15% or so annually. After the market becomes mature, the demand for improvement and upgrade will keep dramatic increase and decrease away from the market. In one word, although the performance of the market now is now satisfying butt it’s still at the stage of growing and the prime time will come later.
3. Air-conditioning Market
In the booming inverter air-compressor market, Toshiba and Panasonic have occupied over 75% share of the market. Sanyo and Hitachi rank behind.
Toshiba keeps its monthly production of inverter air-compressor at 2m, 30% of their total production.
Panasonic will increase the percentage of air-compressor in total production from 40%-50%.
Sanyo already increased their production of inverter air-compressor to over 60%.
In 2010, the air-compressor industry witnessed a 100% growth. And in 2011 the growth rate will be 30%.
3.2 Major Players In The Market
Toshiba has expand their producing capability to 30 million. However, they have outsourced their shell production to local companies who use local machines.
Hitachi Nanchang is now capable to produce 6 million a year and factory in Shanghai can manufacture 18 million annually.
Zhuhai Ling Da boasted they are able to produce 16 million a year while this figure is probably less than 10 million.
Panasonic who uses Japanese machines now is capable of 12 million production.
Mitsubishi have no project until next year which will increase 1 million in production.
Sanyo, after increase in their productivity, can manufacture 8 million now.
Zhirui has a factory in Guangdong which can provide 5.5 million now and another factory in Qingdao which offers 3.5 million. They also planned to increase their productivity to 11 million.
Other companies like Qingan in Xi’an and Sumsung in Suzhou also has plan to increase.
3.3 Major Factors
3.3.1 the property market
From 2009 to 2011, the property market keep boosting is an impetus to the air-conditioning industry which also fundamentally influenced the air-compressor market. however, after the release of the new policy which curb the increase of the property market in august, 2011, the market will experience the decline for sure in the future. And this will influence the market for a long time.
3.3.2 rare earth
The price of rare earth this year has increased by 2-3 times. And this material is key to permanent magnet. That explains why almost all the air-compressor manufacturers delayed or even cancelled their projects. However, after the manufacturers adapt their production to the other economic material, ferrite. This effect on compressor, and its shell production will be eliminated.
The air-conditioning market will experience a decline. However, for the air-conditioning producers have found new points of growth, although the market for air-pump and air-conditioning just start and the property market will recover after the government control, the market will boost again after for sure.
4. New Market
All the compressor producers have now shift their focus to air-pump and cloths dryer, especially air-pump which is promoted and supported by the government and they use the same compressor as that in air-conditioning. But the market is now still very small, say 1 million sales in China a year. But according to the government document, the size of the market will be developed to 5 billion RMB in 3 years.
As its main downstream markets, refrigerator and air-conditioning market, will probably decrease their growths next year. As a result, the compressor manufacturers also delay or even cancel their projects according to the situation. While the demand from the efrigerator and air-conditioning market is still there, so after the economy recovered, the air-compressor manufacturers would meet another around of demand.
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