China could have a glut of air-conditioners, and may end up stockpiling as many as 30 million units in 2006, according to a report from China's Market Economy Research Institute, part of the State Council Development and Research Center.
The Institute report said that China's top-ten air-conditioner companies manufactured 75 million units in the first 6 months of 2005, with total output of 80 million. This was 23 percent, or 15 million units, higher than 2004, the Institute said, while domestic demand is estimated at just 50 million units.
China OEMs Zhuhai Gree Corporation (Gree Electronic Appliances in Zhuhai) and Haier Group (Qingdao) have said they manufacture 10 million air-conditioners per year, and Midea (Guangdong) stated it will increase production to 11 million units in 2005. With other large air-conditioner makers expanding production in a bid to grab market share, the Institute believes China will experience a glut of manufactured product, which could exacerbate ongoing price battles.
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