The weather finally met the high temperature that the air conditioner manufacturers expected, but the terminal market did not show a blowout market due to the continuous high temperature climate. The explosive growth of domestic demand in the past two years has made the whole industry confident in reappearing the high growth phenomenon in this year's market. Inflated, the huge amount of delivery in the early stage has become a heavy inventory pressure. In fact, there is no destructive landslide in the market. The stable replacement demand supports the market base of air-conditioning products, but only high expectations and high growth. The contrast between the difficulties is too great.
For example, the explosive growth in 2016 and 2017 is difficult to replicate in the long term. It is difficult for the domestic market to reproduce such a large market for a long period of time. The fluctuations around the basic demand scale will be the norm in the development of the industry, because some macroeconomic aspects And the essential factors in the industrial development environment determine the formation of this pattern.
In the context of a drastic reduction in the entire fixed asset investment at the macroeconomic level, China's air-conditioning industry has experienced a long-running capacity expansion boom in the past year. The long-standing lack of capacity shortage last year was the cause of this investment behavior. There is a sharp gap between the demand and the scarcity of demand resources. It is inevitable that the market trend is difficult to achieve the planned plan.
More importantly, the investment boom has exacerbated overcapacity, but also undermined the supply-demand relationship and intensified the contradiction of oversupply. On the contrary, the entire industry's investment in technological innovation has not kept pace with the expansion of capacity. The emergence of the brand has weakened the progress of technology and products to a certain extent. The stronger the Matthew effect of the industry in today's strong, not entirely because leading and mainstream brands have strong channel control and brand influence. , to a greater extent, because these brands have strengthened their resources in product and technology competitiveness.
Consumption upgrade is an inevitable trend, which determines that it is difficult to have a sustainable growth space by expanding the market sales scale at a low price. Around the product quality, user experience improvement and enterprise operational efficiency improvement will become the core of the change of brand status. Elements, but those companies that have done a good job in these areas have performed well in the past few years in industrial development and market competition.
The macro-economy has also brought about the impact of the industry under the circumstance, especially under the policy of deleveraging and liquidity contraction, the development of industries similar to the real estate and air-conditioning products are closely related. Regulation, this directly reduces the growth of the scale of new demand. Moreover, after de-leveraging, the financial turnover and financial pressure faced by various manufacturers have also increased sharply.
The huge number of brands and scattered niche groups are not conducive to the improvement of the ecological environment of the air-conditioning industry. Some SMEs have disrupted the market order through aggressive price measures, especially after a large number of low-quality and low-priced products have flowed to the market. The normal circulation has brought about a negative impact. With the intensification of the contradiction between supply and demand and the further tightening of liquidity, the air-conditioning industry is also facing restructuring, and the large number of idle resources have been reorganized or withdrawn as a natural phenomenon of industrial progress.
The current unsatisfactory domestic air-conditioning market does not mean that consumer demand is wilting, largely because of our own high growth expectations, high marketing growth targets, and distortions in supply and demand in a demand-poor environment. External opportunities are no longer rich, and enterprises need to focus on creating endogenous growth models that focus on product competitiveness and brand image and value, which are based on product and technology innovation.
