Household Appliances: Energy Saving Subsidy Produces Vicious Competition

How to evaluate the energy saving subsidy policy that has driven tens of billions of consumption in China? Home appliance manufacturers have given a variety of opinions. Before the end of energy-saving subsidies and the opening of new energy-efficiency standards, Sohu Appliances visited a number of home appliance companies and beneficiaries of energy-saving subsidies, hoping to restore as much as possible a real energy-saving subsidies.

1. Pragmatic subsidies are of little significance to the company. Skyworth executive vice president and marketing director Wang Hai of the China Marketing Headquarters of the Skyworth Group said in an interview with Sohu.com that the energy saving subsidies at the current stage are supplemental, for the whole company. There are not many benefits. Of course, consumers have real benefits.

2. Occupation of corporate funds It is an established fact that high energy inventories caused by energy subsidies. Wang Hai said to Sohu appliances that the funds are still relatively serious. Sohu Household Appliances Research Skyworth Financial reported that the company’s inventory management amount rose to 5.1 billion yuan, compared with 3.1 billion yuan, a sharp increase of 62.1% year-on-year.

3. Advance Overdraft Consumption Lenovo Group General Manager Ren Zhongwei told Sohu Appliances that this general-type subsidy has overdrawn the market's spending power to some extent. Data show that in June this year, Skyworth TV's domestic sales fell 17% year-on-year, from 405,000 units in June last year to 336,000 units; TCL color TV's domestic sales of 282,200 units, a year-on-year drop of 35.47%.

4. Give birth to unfair competition in the industry An appliance company executive who asked not to be named said that fraudulent compensation is only one aspect of unfair competition, but it is more representative. According to a survey report issued by the National Audit Office, 8 well-known home appliance companies such as Gree, Galanz, TCL, Midea, and Changhong all had violations of the central government's energy-saving promotion subsidy funds, involving a total amount of 90,618,400 yuan.

5. Big home appliances manufacturers look forward to the New Deal Although the surveyed home appliance manufacturers have their own views on energy-saving subsidies, they are optimistic about the upcoming new energy efficiency standards. According to several sources, the new energy efficiency standards will be greatly increased. Compared with the previous Pratt & Whitney policies, the New Deal will have more significant support for powerful companies and may trigger reshuffle in the future. As a result, large household appliance manufacturers are widespread. Look optimistic about the New Deal.