SOURCE: Freedonia Group, Inc.

November 14, 2006 10:57 ET

Demand for Household Appliances in China to Exceed 138 Million Units in 2010

CLEVELAND, OH -- (MARKET WIRE) -- November 14, 2006 -- Demand for major household appliances in China is projected to increase 4.5 percent per annum through 2010 to 138 million units, outpacing growth in most other parts of the world. Low penetration rates for most major appliances -- especially in comparison to the penetration rates in developed countries -- will be the key reason for growth in demand. Advances will also be boosted by healthy household formation rates and the large stock of appliances put into use over the last ten years, as many of these will require replacement. Rising personal income levels and growing urbanization will provide further support. Value growth will significantly outpace volume growth due to price increases. These and other trends are presented in "Household Appliances in China," a new study from The Freedonia Group, Inc., a Cleveland-based industry market research firm.

By the year 2010, China will overtake the U.S. as the world's largest major household appliances market. The country is already the world's largest producer and exporter of these products. However, growth in exports will slow from the torrid pace of the 1995-2005 period, in part due to increasing competition in offshore markets from other low-cost producing nations as well as to the establishment of offshore facilities by some Chinese manufacturers. Nevertheless, shipments of appliances from Chinese manufacturers will top the 300 million unit mark in 2010, with nearly 55 percent of these earmarked for export.

Cooking appliances will remain the largest segment and post the fastest growth through 2010. Advances will be fostered by favorable replacement market dynamics and further growth in the number of households. Demand for dish sterilizers and dishwashers will also climb at an above-average rate, benefitting from the growing popularity of these appliances in Chinese households, due in part to health-related concerns. Refrigeration equipment and laundry equipment will experience below-average but healthy gains as rising average incomes create opportunities for further market penetration.

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