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According to iSuppli, due to the global economic recession, exports are expected to decline. It is expected that China's major home appliance exports will decrease by 2.7% in 2009. Total shipments of major home appliances in China are expected to reach 177.5 million units in 2009, down from 182.4 million units in 2008. Total shipments represent market trends in major appliances such as air conditioners, washing machines, refrigerators and microwave ovens.

    Exports will fall by 8.5% from 2008, from 108.3 million units to 99.1 million units.

    China's domestic market will continue to grow due to government subsidies, despite the global economic slowdown. The Chinese Ministry of Finance has expanded a stimulus plan to reduce the price of rural consumers to purchase home appliances by 13%. This measure has kept the domestic market growing at a fairly rapid pace, although not as strong as it was in previous years.

 

    China's large domestic equipment manufacturers control the major home appliance market. These companies are pursuing product differentiation strategies in the domestic market, and are cost-effective in export markets. Designing a major home appliance with new features that appeal to consumers is a major challenge for manufacturers.

    These companies are adopting a vertical integration strategy to control key components and equipment to help reduce production costs. Many companies have begun to outsource low-end products to contract manufacturers. In order to improve equipment utilization, major home appliance suppliers are reluctant to expand production capacity.

Due to the lack of innovative and diversified products in the non-inverter air conditioner market, China's major air-conditioning companies are developing products that use inverter technology.

  

    Due to the high price, it is expected that the China inverter air conditioner market will only grow moderately in 2009-2010. Chinese local companies are still weak in product design and market development of inverter air conditioners. Chip suppliers need to provide a total solution for controlling variable speed motors. The key chip used by major home appliances, the microcontroller (MCU), is controlled by Japanese suppliers. By establishing close partnerships with Chinese ** home appliance companies, Japanese suppliers have gained control in the MCU field. For suppliers that supply semiconductors to major electronics companies, air conditioning is still a more important market. Therefore, it should also be more important to the development of the aviation industry, so as to better drive the entire market.