Air Conditioner Makers Slash Production in China

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Last updated at: (Beijing Time) Tuesday, July 02, 2002

Air Conditioner Makers Slash Production in China

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Unusual coolness and wet weather nationwide has prompted many Chinese air conditioner makers to cutproduction since mid-June, with some stopping altogether, the Beijing Morning Post reported on Tuesday.

Contributory compressor manufacturers had also suspended production, said the newspaper.

During June, floods occurred in the west and south of the country, while in north China cool early summer conditions were followed by a succession of rainy days, according to weather reports.

Liu Liang, deputy general manager for marketing with the Midea Air Conditioner Co., told the newspaper that his firm had cut production since June 20 because of sustained wet and rainy weather. Normally the industry expanded production at this time ofyear.

Meanwhile, the country is facing a glut of air conditioners.Official statistics put this year's national demand for air conditioners at between 15-17 million units. By last year, air conditioner makers across the country were capable of producing more than 20 million units.

Industry experts noted that a big rise in the demand for air conditioners for home use in recent years had misled manufacturersinto over-estimating this year's market.

There are now over 5 million air conditioners in stock for the peak sale season in June, July and August. But if the cool and cozy days continue, both air conditioner manufacturers and retailers will have to face a serious capital-turnover problem.

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