China's Air-Con Sector Soars to Best Performance in 10 Years, Gree Executive Says (Yicai Global) Aug. 17 -- China's air-conditioning market has boomed this year to see its best performance over the past decade, said Huang Hui, executive president of Gree Electric Appliances. Inc. [SHE:000651], the country's biggest air-con manufacturer.
Both sales and sales volume have hit all-time highs and total sales are expected to reach CNY169.5 billion (USD24.9 billion) this year.
Gree has been consistently producing at full capacity since September last year, Huang said.
The total volume of sales this year is predicted to grow 9.9 percent annually to reach 49.6 million units. For comparison, the preceding years saw more modest rises of 0.5 percent and 1.4 percent, respectively, said Zhang Yanbin, president at trade body AVC Air Conditioning Industry Research Institute.
Key drivers of this year's boom are a rise in demand stemming from last year's robust real estate sector, a willingness among consumers and distributors to buy under price rise expectations and the fact that last year set a low market base for the industry. Hot weather has also buoyed the market, Zhang said.
The market rise will subside in the second half of this year and the sector will gradually shift from an incremental market to a stock-based market, Zhang predicts.
Gree will look to take advantage of the trend among northern Chinese customers to buy coal-to-electric heating systems in order to boost winter sales.
These heat pump air-conditioners can use hot air directly, thereby reducing costs and improving system efficiency, said Li Xianting, professor at Tsinghua University.
"The key is how to produce air supply well. Gree is a good solution for that. Now that problems related to even temperature distribution have been solved, energy efficiency can be improved."
The Chinese government brought in a series of coal reform policies in 2016, driving the rapid development of heat-pump air-conditioning. The total sales volume in the market reached 216,000 units last year, and sales exceeded CNY2.8 billion (USD412 million) at a growth rate of 585.4 percent.
