(Yicai Global) May 27 -- As summer approaches, the peak season for air conditioner sales has arrived. But the price competition of previous years is not expected to be repeated this year, according to industry insiders.

While there used to be many low-end products in the market, manufacturers are now promoting high-end machines, a source in the home appliances sector told Yicai Global. That makes price competition far less probable.

“An overall price war is unlikely,” the person said. “Though it may happen in local areas.”

A two-year decline in demand for household air-conditioning units ended in the first quarter of 2021 as sales jumped even as prices rose, according to Peng Xiandong, general manager of the consumer electronics department at China Market Monitor.

The average price fluctuated at a higher level between January and April, while the market share of mid-to-high-end products, such as ventilation air cons and smart voice units, increased. Price wars have given way to product competition, Peng said.

He expects the average retail price of an air conditioner for home use to gain 10.6 percent this year as retail sales jump 22.8 percent.

Manufacturers are reluctant to turn out low-end machines as raw material costs are rising and exports are strong, the source in the home appliance sector noted. But some firms will use this year’s June 18 online retail event to boost first-half sales, so there may be some sporadic local skirmishes involving pricing.

“Companies need to balance making profits for shareholders in the capital market and delivering value for consumers before starting a price war,” said Zhang Yanbin, who tracks the air-conditioning industry.

Online sales on June 18 will miss last year’s level, partly because 2020’s promotions were excessive, Liu Daren, assistant president at AVC, told Yicai Global. This year, air con sales will fall 11.2 percent to CNY19.1 billion (USD3 billion) during the event, and the number of units sold will drop 20.6 percent to 7.8 million, he predicted.

China sold 54 million home air conditioning units in the four months ended April, up 27.1 percent from a year ago, according to industry figures. Some 25.5 million were sold in China, up 42.7 percent, while 28.5 million were sold abroad, up 15.8 percent.

Editors: Tang Shihua, Tom Litting