Following notable development in 2007 until 3Q08, China's motors industry faced a difficult situation in 4Q08 when output and revenue started to decline substantially. Aggregate shipments dropped to 53.8GW in 1H09, falling nearly 16 percent YoY. Overall sales were at $1.7 billion, posting a 10 percent reduction. About 75 percent of makers also reported a decrease in profits as a result of the global economic downturn. These are based on statistics from the small- and medium-sized motor branch of the China Electrical Equipment Industrial Association.
Production began improving in 2H09, thanks to robust demand generated by the domestic market. Many suppliers have therefore pinned their hopes on local trade in anticipation that this trend will persist. Jiangkou Electric Appliance Mfy Ltd, for instance, expects China sales to increase by 10 to 20 percent in coming months. Currently, it exports only 40 percent of total output.
Also positive about the local market is Galanz Motor Manufacture Co. Ltd, which projects revenue will grow by as much as 40 percent. Helping boost optimism is China's Home Appliances to the Countryside project, as its parent company, the Galanz Group, is considered one of the major appliance vendors in the country. Galanz dedicates 85 percent of turnout to the domestic market. For exports, the company is concentrating on the Asia-Pacific region and the Middle East but will continue expanding its reach in North America.
Looking forward to healthier orders, both Jiangkou and Galanz are ramping up capacity. The former currently makes 2.5 million motors a month at 90 percent utilization. A new factory, expected to run in 4Q10, will raise this to a monthly average of 5 million. Galanz, meanwhile, will increase its 800,000-unit capacity by up to 30 percent.
Other suppliers, especially those that are export-oriented, have no immediate plans to expand due to uncertainties in overseas demand. Chuang Yang Enterprise Co. Ltd, for example, operates at only 60 percent of capacity, receiving small requests from its main markets Europe and North America.
Disclaimer: All product images are provided by the companies interviewed and are for reference purposes only. Those product images featuring products with trademarks, brand names or logos are not intended for sale. We, our affiliates, and our affiliates' respective directors, officers, employees, representatives, agents or contractors, do not accept and will not have any responsibility or liability for product images (or any part thereof) which infringe on any intellectual property or other rights of a third party.