With rising costs and increasing sales, when will the air-conditioning industry be able to break out of the vicious circle of buying high and not buying low?

Since the rise in prices of raw materials such as copper and plastic at the end of last year, there has been a steady stream of news about "air conditioner price increases." Now, with the arrival of the air conditioner peak season, manufacturers are facing a new round of price hikes.

Recently there have been reports that, except for the leading brands, many factories are out of stock of fixed-speed products, and can only deliver goods according to a 20% ratio. This structural market imbalance not only makes variable-speed products the only choice for consumers in many markets, but also causes the overall air-conditioning market to intensify the wave of price increases.

Not only that, refrigerants are also facing the problem of insufficient production. Take R125 as an example. The price of R125 has increased by 30,000 to 40,000 yuan per ton this month, with an overall increase of nearly 50%, and some products have increased by more than 80%. This makes the price increase of air conditioners almost an inevitable reality this summer.

Manufacturers face increasing cost pressure and are exploring new revenue growth points

According to a well-known domestic home appliance manufacturer, due to the increase in raw material prices, the production, installation and logistics costs of air conditioners in May increased by 14% to 15% compared with the same period last year, which directly led to a 10% increase in air conditioner shipment prices since 2017.

Faced with the increasing pressure on air-conditioning production costs, air-conditioning manufacturers have to adopt new market response strategies to try to maintain a balance between cost and price.

For example, Midea has focused on intelligent production and hopes to develop production technology into a commodity that can be sold externally in addition to air-conditioning products. It will use KUKA's technology to carry out more comprehensive intelligent and automated transformation of its factories, and continue to develop intelligent robots as an independent business to gain new revenue growth points.

Gree, on the other hand, is expanding vertically and horizontally in the home appliance industry chain through the linkage of its air-conditioning business with Jinghong refrigerators and Dasong small appliances, in order to seek market space for new product categories other than air conditioners and offset the side effects of rising air-conditioning production costs.

In addition, Haier, which chose to build the U+ smart life ecosystem and interconnected factory, tried to connect the manufacturing and service industries, allowing users to participate in product research and development, design and other processes, and seek higher premium price adjustments for air-conditioning products with rising basic costs by providing differentiated products that meet users' personalized needs.

Inventory pressure turns into capacity crisis, consumers are forced to buy high and not buy low

Before the cost crisis came, the pressure of "destocking" in the blank industry has always been a hot topic. However, with the tight supply situation in the upstream of the industrial chain and the gradual strengthening of market demand in summer, the original inventory pressure has become more and more obvious.

According to retail monitoring data, during the May Day holiday this year, the year-on-year growth rates of air conditioner online market retail volume and amount were 89.5% and 115.0% respectively, while the offline market maintained a stable growth, with year-on-year growth rates of 2.5% and 9.7% respectively in retail volume and amount.

Even in this situation where both revenue scale and operating profit have reached new highs, the production speed of air-conditioning companies is very likely to fail to keep up with the pace of market demand.

A person related to the upstream supply chain of the air-conditioning industry revealed that according to the rules of previous years, the demand for compressors will gradually decrease in June and July, but compressor companies still need to complete the delivery of orders that could not be delivered on time in June this year. The future supply situation of compressors will depend on the specific performance of the terminal market.

Obviously, the "dependence on the specific terminal market performance" here means it is not very optimistic in the context of rising demand in the air-conditioning market.

As far as the current situation is concerned, the fluctuation of upstream raw material prices has led to an increase in the prices of air-conditioning products, but has not had a substantial impact on product sales. The reason is that due to the high temperature weather environment in summer, users have a strong demand for air-conditioning products, forcing them to fall into a vicious circle of buying high and not buying low.

According to people familiar with the matter, the current turnover inventory of several air-conditioning compressor companies is lower than the monthly production capacity of 1 million units, and the inventory level is 30%-40%. This shows that the trend of rising air-conditioning prices but insufficient supply this year may have just begun.

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.