Amid media reports that air-conditioners will become more expensive this summer, some Chinese home appliance retailers have surprised the market by slashing prices instead.

 

Gome, the country's largest home appliance chain, announced this week that it would lower the price of most air-conditioners by 15 to 20 percent.

 

The Beijing-based electrical appliance chain Dazhong also said that it would not raise prices and said some air-conditioners would go on sale for less, with the highest drop of 1,600 yuan (US$200) per unit.

 

Since early March, major domestic air-conditioner makers announced they would lift prices by as much as 15 percent because of rising costs of raw materials.

 

"Price hikes are not good for consumers nor for the market," said He Yangqing, Gome's brand management director.

 

He said the firm has one million air-conditioners in stock, and plans to sell them at reduced prices.

 

"Retailers will not raise prices in case they may lose out on this year's best-selling season, and manufacturers have also hesitated in making any bold moves," said Yang Jun, Dazhong's air-conditioner business director.

 

However, Jiang Feng, secretary-general of the China Household Electrical Appliances Association, said manufacturers will find it difficult to survive if the price war continues, as the air-conditioner manufacturing industry is already suffering from losses.

 

Some manufacturers did raise their prices a little in March and May, according to major retail chain Suning.

 

(China Daily June 15, 2006)