Profits reached a record low prices microwave giant to join – microwave ovens, Galanz, the United States – the HC network appliance industry

The average profit has reached historically low levels

Learned recently from the 2005 seminar was informed that the microwave oven industry trends, raw material costs, freight costs and marketing costs increased, the overall profits of China's microwave oven industry declined rapidly, and some companies even huge losses, in order to save the industry, beauty Managing Director Zhu Fengtao called microwave oven, the Chinese microwave oven enterprises join hands to stop price competition, improve the domestic and export prices microwave oven.

Steel prices continued to rise, oil prices break through 57 U.S. dollars a barrel, home appliance chain "started taking" of enterprise marketing costs. Recently, the United States announced in Shunde, one after another shutdown current marketing is still a good low-end "special opportunity" to give up its price war; At the same time, domestic sales of the first microwave oven
Also Monday, said Chen Gang, deputy secretary general of China Household Electrical Appliances Association, said the price war is the domestic market has been extended to overseas markets, coupled with rising raw material prices, the average profits of enterprises microwave oven has reached historically low levels, and some have even negative profits.

Profit or bottom of the post-war price

Easily price a few years ago a few thousand dollars worth into the microwave oven can rapidly lower house of the Chinese people, "price war" contributed. Microwave easily 20% to 40% reduction efforts that
Companies are strange enough. Microwave Market After a series of brutal price war, after baptism, no-name products are eliminated, the market threshold increase.

2000 years later, the productive capacity of the domestic microwave oven industry is much higher than market capacity, competition, price wars as the main means of microwave companies have felt the "diseconomies of scale" pain. Since 2004, the product unit price falling, while the domestic sales market continues to shrink. According to Customs statistics, from 1998 to 2004, microwave ovens from the 81.8 U.S. dollars export unit price / audience dropped to 36.7 U.S. dollars / units, down by more than half the domestic market, the retail price of microwave ovens is dropping lower and lower, nine-year price war profits or bottom. According to the PRC, National Bureau of Statistics data show that 1-7 in 2004, domestic sales of microwave ovens fell 9.69 percent, up to 25% of the month.

When raw material prices in 2004 the shadow of attack when the home appliance industry, microwave oven industry more difficult. As steel, copper, compressors and other raw material prices, coupled with the export policy adjustments, such factors as lower export prices, household appliances profits have fallen sharply, according to microwave oven manufacturers to disclose, material prices has exposed the consequences of price wars, the overall industry profits down Microwave profits have been squeezed to 3%.

Technology, prices of many breakthrough value

Reporter was informed that, in this case, the United States, and Glanz have made on their own strategic adjustments.

It is reported in the United States has and Suning,
Country United States
Jointly announced that the full realization of the price war, after the transition to the technology war, the US's will implement the "reduction of the terminal high-quality gifts, phasing out low-end models, the main function to promote the economic model" strategy, while the formation of specialized domestic marketing companies to increase market responsiveness.

U.S. microwave business unit general manager Zhu Fengtao said soaring steel and other raw material prices, increased foreign trade barriers, rising production costs, microwave oven industry do not end "price shopping" and will lead to the collapse of the industry. But he said: "As the price factor is very sensitive, domestic microwave ovens are not easily raise prices giants, fear of losing market share, the United States in this major will be taken to reduce the premiums, and discontinued the practice of low-end models."

And Galanz last September in the microwave one-time price increase exports 30%, the major competitors were not followed up, it suffered the loss of customers, "labor pains", the price adjustment in the domestic microwave oven in their more cautious. Galanz vice president of marketing Yuyao Chang told reporters: "including internal meetings to discuss the price increases in the way, is one step or several steps, and now has not been finalized, but it is certain that this year the market price of the domestic microwave oven will increase the specific rate of not OK. "

Price alliance is not possible

Prices for microwave ovens cause Yuyao Chang said that the microwave oven industry profits have been low this year, in addition to raw material prices, higher oil prices lead to increased freight costs, the home appliance chain giant's "Happy Valley enclosure", the market volume is not large changes, but the consumption of diversion and the cost of the numerous marketing approach to increase the microwave oven manufacturer's operating costs, manufacturers can not be trading at a loss.

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