China produced a record 15m air-conditioners in 2002,18 per cent more than in the previous year, according to a report by the Hong Kong Trade Development Council. In the same period sales dropped by 40 per cent to Yn50bn, with profits slipping by 22 per cent and inventories increasing by 53 per cent to leave more than 7m units in store.
Companies that have been doing well include newcomers that have cut prices and aggressively promoted sales. Examples include Guangdong Galanz Enterprise Group and Aux, previously an obscure brand that became the third best seller in the market in 2002. They have benefited at the expense of better-established brands such as Haier, Midea and Gree, which seemed reluctant to cut prices and are now said to have combined stocks worth more than Yn10bn .