Home appliance market sluggish as subsidy expired
"Regular subsidies can't always be effective. Like product promotions, consumers won't think of them as meaningful if they occur everyday. They become numb toward those promotions. After all, the home appliance market is driven by demand, not subsidies," said Zhang. "Subsidies can't create demand."
At the beginning of May, the China Household Electrical Appliances Association handed a document to several government ministries, including the Ministry of Finance, suggesting the Central Government put an end to subsidy programs. According to the document, companies would be forced to create products that comply with government subsidies rather than create products according to market and consumer demand.
Xu said household goods are durable consumer goods. Customers won't buy two of the same product simply because of a subsidy.
China's support for energy-efficient home appliances won't change. If the government is worried about market confidence because of a lack of subsidies, it can set up a fund to reward companies that have invented new technologies. This will encourage companies to invent new green product types and cultivate a future market, he added.
Lu Renbo, Deputy Secretary General of the China Electronics Chamber of Commerce, echoed Xu's viewpoint, adding that government support can only boost the market to a certain extent, but product innovation and quality improvement rely on the concerted efforts of companies.
"Only in this way can the market develop properly," said Lu.
Some industrial watchers say the biggest achievement of the government's most recent subsidy was the increased awareness by consumers of energy-efficient products.
For smaller home appliance makers, however, they worry about their post-subsidy future.
"Without subsidies, some consumers will turn to cheaper but more energy-consuming home appliances," said Lu. "I hope that the government can establish a long-term plan conducive to the healthy development of energy-efficient appliances."
