China's central air-conditioning market has entered a stable growth period

It's a difficult start, and the market will get better in the future - the development of China's central air conditioning industry in 2012 generally shows this trend. Since May and June 2012, the industry has generally started to recover, and recovery growth has become the main theme of the market in the second half of the year.

In 2012, the overall sales scale of China's central air-conditioning industry reached 57.2 billion yuan, down 0.6% year on year. Excluding the sharp slowdown in the growth of China's central air conditioning industry caused by the global financial crisis in 2008 and 2009, the overall average growth rate of the entire industry in recent years exceeded 20%. By 2011, the overall scale of the national central air-conditioning industry had almost doubled compared with 2007. The rapid growth for many years, on the one hand, stems from the fact that China's central air-conditioning industry is still in the rising trend of development; On the other hand, in the past few years, China's macro-economy has ushered in unprecedented development, especially in the trend of infrastructure construction and urbanization development, municipal projects, industrial projects and civil projects have all ushered in a construction climax. These factors have greatly promoted the growth of China's central air-conditioning industry. In addition, in order to stimulate domestic demand, the state has introduced a series of support policies, which not only stimulate the macro-economy but also boost the development of the central air-conditioning industry.

By 2012, China's GDP growth slowed down, breaking the "eight" mark for the first time in several years. The external manifestation of the slowing down of macroeconomic development is the slowing down of a large number of project construction and the sharp drop in the growth rate of the real estate market. The impact on the central air-conditioning industry is directly reflected in the sharp reduction of corporate orders and the market decline in 2012. According to the data of more than 60 mainstream central air-conditioning enterprises in China monitored by HVAC Information, in 2012, half of the enterprises' sales performance declined year on year, and among the enterprises whose performance increased, only a few enterprises had a growth rate of more than 15%.

The mainstream enterprises in China's central air-conditioning industry are divided into four camps, namely European and American enterprises, domestic household appliance enterprises, domestic water chiller enterprises and Japanese and Korean multi unit enterprises. With the construction of their own product lines, the differences between the above brands are gradually narrowing. In recent years, European and American enterprises and domestic household appliance enterprises have made great efforts around product line extension and product innovation. Therefore, these two major groups of enterprises are involved in water chiller and fluorine unit products, and their product lines are also developing towards a broad and complete direction. On the contrary, Japanese and Korean multi unit enterprises and domestic water chiller enterprises still stick to their respective fields of specialization. The difference is that as the multi unit products are still in the trend of rapid development, the specialized multi unit enterprises need to consider how to develop stably in this specialized field; Due to the lack of technical reserves and channel advantages, domestic traditional water chiller enterprises are difficult to enter the fluorine unit market. Therefore, these two camps of enterprises still exist and develop in their respective market areas.

In 2012, the biggest change in the brand pattern of China's central air-conditioning industry came from the replacement of the industry's sales scale champion. In the year of this report, Gree, a national brand, surpassed Daikin and became the sales champion of China's central air-conditioning industry with a market share of 14.3%. Compared with 2011, Gree increased its market share by 2.9 percentage points, which is the first time that domestic enterprises surpassed foreign enterprises and led China's central air-conditioning industry.

In general, domestic household appliance central air-conditioning enterprises and Japanese and Korean multi unit enterprises have developed relatively fast, while European and American enterprises and domestic traditional chiller enterprises have developed relatively stably, which is also the basic competitive pattern of China's central air-conditioning industry in recent years. However, it should be noted that Daikin, which has achieved a large sales scale, declined significantly in 2012, which led to the overall market share of Japanese and Korean multi unit enterprises being lower than that of 2011. If the factor of Dajin is excluded, even under the influence of the downturn of the real estate market and the tension between China and Japan in 2012, the Japanese and Korean multi unit enterprises still have a rapid growth overall.

From the comparison of the share of European and American brands, the development of European and American brands has been relatively stable, and the overall share of the sample brands listed in the report is basically the same as that of the previous year. In the middle of 2012, some European and American central air conditioning enterprises began to make efforts in the market for products other than chillers. Enterprises including York, McVeil and Carrier have started to lay out the products of variable frequency multi connected units. In 2012, York focused on the introduction of variable frequency multi connected units with large cooling capacity, and carried out channel promotion nationwide. Based on the strong brand pull and market recognition of European and American brands in the Chinese market, it can be predicted that in the next few years, the market pattern of China's variable frequency multi connected units will inevitably change, and it is only a matter of time before European and American brands become an important force in the variable frequency multi connected units market. On the other hand, in 2012, the position of European and American brands in China's water chiller market has not been really challenged, and this feature will not be changed in the next few years.

From the perspective of the share of domestic household appliance central air-conditioning enterprises, although the overall market performance of enterprises including Gree, Midea, Haier, Oaks, Zhigao and TCL is impressive, their differences are relatively obvious in the past year. Since the first half of 2012, Gree has replaced Daikin's leading position for many years and maintained its leading position throughout the year, which is also the result of Gree's long-term adherence to the specialization strategy. Although Midea lost some market shares, it should be pointed out here that since the statistical perspective of this report is enterprise payment collection, Midea has made efforts to consolidate itself and digest channel inventory in 2012, but these efforts cannot be reflected in the data of the report. Looking at the whole year, although the decline rate of China and the United States in the first half of the year was obvious, the pace of development was regained in the second half of the year. What is worth mentioning is Haier. Since 2011, Haier has made renewed efforts, combed the market and started to promote the national and regional markets. These actions have helped Haier to regain its lost market position. In addition, it cannot be ignored that the domestic household appliance central air-conditioning enterprises are getting rid of the shadow of relying on unit units to survive. In addition to Gree, Midea and Haier, domestic household appliance enterprises, including Oakes, Zhigao and TCL, have achieved steady development year by year in frequency conversion multi unit products, and domestic household appliance enterprises are the only way to truly achieve development. Compared with European and American brands, domestic water chiller enterprises have experienced a difficult year. According to the monitoring data of HVAC Information, more than half of domestic water chiller enterprises experienced a decline in sales performance in 2012, while almost all of the other enterprises experienced a slowdown in growth. The reason is that Chinese traditional water chiller enterprises still lack core competitive advantages for a long time. When the market environment changes, the domestic water chiller enterprises' ability to resist risks is relatively weak. Therefore, the market performance of domestic water chiller enterprises is relatively stable in the reporting year.

The market performance of Japanese and Korean multi unit enterprises in 2012 was somewhat unexpected. Although most enterprises still maintained a steady growth, the overall share of sample brands declined significantly compared with the past. As mentioned above, it was caused by the sales decline of Daikin in 2012 rh. In 2012, the weighted markets of multi unit products in East China, including Jiangsu, Zhejiang and Shanghai, declined to varying degrees. Among them, the multi unit market in Zhejiang and Shanghai declined significantly, and the growth of Jiangsu market slowed down. This shows that after years of crazy growth, the multi unit market has finally reached a relative peak. In the future, from the weight market, the multi unit market will change from rapid growth to stable development. In addition, some enterprises began to continuously try to innovate in the field of multi unit specialization. For example, in 2012, Hisense Hitachi launched the Water Source Multi unit Design Competition to try to differentiate in the multi unit market and give more new ideas to the multi unit product market, which is also the trend of future market development.
Market Outlook in 2013

With regard to the development of China's central air-conditioning industry in 2013, there are views that the market has warmed up from the second half of 2012, and 2013 will usher in a new start. There are also views that the poor market performance in 2012 is mainly due to the implementation of the projects signed in 2011, and the difficulties can only be regarded as the real start in 2013. In fact, these two situations will be reflected in the market in 2013: First, China's macroeconomic development has been difficult to recover to the high-speed growth channel in previous years, and the policy stimulus has partially overdrawn the market potential. It is the general trend to return to the normal development track, and the HVAC industry will also change from a crazy growth to a stable growth trend. Second, under the general trend of stable growth, the development of China's HVAC industry has both uncertainty and potential crisis due to factors such as the real estate market. On the whole, the weighted market with Beijing, Shanghai and Guangzhou as the center may still slow down or decline further, but the market in the central and western regions will still develop rapidly due to the lagging development of the region.

Although the development of China's central air conditioning industry experienced the first decline in many years in 2012, it must be affirmed that China's central air conditioning industry as a whole is still on the rise. In previous industry development reports, the definition of the development of China's central air-conditioning industry is often described as "rapid development". Since 2012, it is turning to "stable development". This means that the central air conditioning industry in the era of crazy growth and huge profits has become history. Although there are still particularities in individual markets or projects, it is a foregone conclusion that the commonality of "rapid development" to "stable development" has become a foregone conclusion. "Stable development" is also a judgment on the development trend of China's central air-conditioning industry in 2013. In addition, attention should be paid to the fact that in 2012, domestic water chiller enterprises showed obvious lack of resilience when the external environment changed, which led to the phenomenon of blocked development. Although domestic central air-conditioning has experienced more than ten years of development, it is unavoidable that most enterprises have not really established core competitiveness, and the driving force for their survival and development is still the low-cost advantage at the manufacturing end. In fact, China's manufacturing industry is currently in such an awkward situation. Although there are good expectations, of course, the situation may become worse. The cost advantage of China's manufacturing industry has gradually become a thing of the past. Although the human cost is still not too high, the related high costs, including energy costs and logistics costs, have made the "China base" no longer have significant advantages. Foreign enterprises that have established production bases in the Chinese market are seeking ways to obtain lower manufacturing costs by "returning" and moving to Southeast Asian countries, such as Vietnam and the Philippines. China, which is transforming from "manufacturing" to "creation", is unlikely to attract investment with cheap manufacturing in the future, which has become an obvious trend. China's manufacturing industry will eventually change from labor-intensive to technology intensive after several cycles, but this road is too long. Chinese central air conditioning enterprises must be soberly aware of the new situation facing China's manufacturing industry as soon as possible, and obtain real core competitiveness through technological innovation and product innovation, so as to participate in broader and more lasting market competition.