The hot air-conditioning market may encounter a turning point. Will the compressor industry usher in its last carnival?

This year's home appliance industry can be described as "advancing by leaps and bounds". Not only have downstream dealers launched a series of fierce competition, but upstream industries have also ushered in the long-awaited "carnival moment".

According to data, from January to May 2017, the retail volume and retail sales of my country's air conditioner market reached 23.99 million units and 84 billion yuan, up 33.2% and 38.8% year-on-year respectively. In particular, the domestic air conditioner market has shown explosive growth in the past three months.

Under such circumstances, compressors have also ushered in a period of full-scale explosion. It is reported that the rotary compressor industry produced 17.376 million units in June this year, a year-on-year increase of 36.5% and a month-on-month increase of 1.8%, breaking the production record again. The sales in June were even better, with total sales reaching 18.222 million units, a year-on-year increase of 41.4% and a month-on-month increase of 3.1%.

With the booming air-conditioning market, not only has the confidence of the home appliance industry increased, but the compressor industry has also achieved a perfect ending at the end of the cold year.

The air-conditioning industry is facing a severe situation of declining demand, which may affect the upstream market

As the 2017 cold year is coming to an end and the 2018 cold year is about to begin, some industry insiders are cautious about the expectations for the new cold year.

On July 13, Aowei Cloud Network released the "White Paper on the Development of China's Household Air Conditioning Industry in the 2017 Cold Season". The white paper pointed out that supported by multiple favorable factors, my country's domestic air conditioner market grew by nearly 10% in the 2017 cold season, but the previous growth will also overdraw market demand, and coupled with the fading effect of favorable factors, it is expected that the market will decline significantly in the 2018 cold season.

In addition to overdrawing market demand, real estate is also one of the factors restricting the development of the air-conditioning industry. If the situation in the real estate market suddenly changes, the air-conditioning industry will inevitably be affected.

However, in fact, as the macro-control of the real estate market is undergoing multiple rounds of upgrades, the real estate market is now experiencing the trouble of declining growth.

However, the production and sales volume of compressors in the traditional off-season of the cold year in 2017 was higher than that in the peak season. The main reason was the strong and vibrant demand in the downstream market.

This means that the compressor industry, which is still operating at full capacity today, may face a serious overcapacity situation due to the decline in demand from the air-conditioning industry in the new cold year.

The imbalance between compressor supply and demand is not the first time, and reasonable planning is still needed to avoid risks

However, this is by no means the first time that the compressor industry has faced a crisis of excess capacity.

At the end of the 2013 cold season, the production capacity of rotary air-conditioning compressors was still close to 30 million units, a year-on-year increase of more than 21%. At the same time, since air-conditioning manufacturers hardly expanded their production capacity, the entire industry's inventory remained high and retail terminal shipments were lower than expected.

It is the sharp contrast between the speed of capacity expansion and the sluggish market demand that has put the entire upstream air-conditioning industry in a state of fierce competition. At this time, the total capacity of the rotary air-conditioning compressor industry has exceeded 170 million units, further exacerbating the serious imbalance between compressor supply and demand.

The situation faced by the compressor industry today is somewhat similar to the original imbalance between supply and demand.

The sales growth of the air-conditioning market is based on the background of destocking in the industry. Faced with the hot market atmosphere, upstream compressors and other major parts are also produced at full capacity. If the current output of compressor manufacturers is taken into account and the whole machine manufacturers continue to increase production, the industry is likely to form new inventory. Once the industry inventory accumulates again, it will inevitably repeat the imbalance between supply and demand in 2013.

In this regard, the compressor industry generally agrees that it is a good time to ship during the peak season. While accelerating market sales and digesting inventory, studying the current air-conditioning market capacity and market environment and making reasonable plans and layouts for the 2018 cold season have become the best options for the compressor industry to avoid market risks.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.