In recent years, the central air-conditioning market has experienced multiple price hikes, but it was in 2017 that these increases became more noticeable and widespread. By the end of 2017, major brands had announced their price adjustments. Unlike previous rounds, some companies raised prices in consecutive waves, with home central air-conditioning products seeing increases ranging from 3% to 15%. Given the ongoing rise in production costs, it's expected that price increases will continue to spread across the industry.
One of the main reasons behind the price surge was the sharp rise in raw material costs. Copper, aluminum, and steel prices soared, and packaging materials and logistics expenses also increased significantly. Refrigerants, in particular, saw dramatic price jumps—some months saw increases of over 50%. Additionally, stricter environmental regulations led to production shutdowns and delays for upstream suppliers, causing supply shortages and driving up prices. At the same time, new transportation rules reduced load capacities, increasing freight costs by more than 30%.
The competition in the central air-conditioning market intensified in 2017. Both the project and residential sectors became highly competitive. Price wars were common in engineering projects, but rising costs forced many companies into difficult positions. In the retail market, manufacturers worried about how price increases might affect sales, leading to varied strategies among companies. Some raised prices immediately, while others only hinted at future increases without setting a specific date.
From a channel perspective, price increases were inevitable. Engineering firms faced pressure due to low profit margins and delayed payments. If manufacturers passed on cost increases, some could face losses. Stronger firms tried to stock up early, while weaker dealers struggled or even exited the market. In the home air-conditioning sector, online brands had already announced price hikes, though the impact on retail would take time to fully show, especially around year-end.
Some dealers began offering new service models, allowing customers to choose different installation options and pay accordingly. As the market matures, transparency in profits is increasing, and dealers must focus on improving service quality to stay competitive.
Interestingly, consumer sensitivity to price has been declining. Surveys show that as buyers become more informed, factors like design, company reputation, and after-sales service are becoming more important than price alone. A reasonable price increase is now more acceptable.
There’s no need to overreact to these changes. While the price hike may seem daunting, it can act as a double-edged sword. It pushes companies to improve product quality and optimize operations, which can lead to healthier market development. Although marketing challenges will grow, this shift also encourages better business practices and a more sustainable industry.
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