Household appliance manufacturers from home and abroad have remained their positive outlook for the Chinese market despite the challenges of more intensive competition and rising prices of energy and raw materials.

Companies including Bosch, Siemens and Haier shared this view while displaying new technologies and products at the 2008 Appliance World Expo, which opened yesterday and runs until Sunday at Shanghai Everbright Exhibition Center.

Many companies are confident they will boost sales thanks to strong domestic demand. This is despite concerns about a gloomy export market due to the accelerating appreciation of the yuan and the looming global economic slowdown.

Roland Gerke, the president and chief executive officer of Bosch and Siemens Home Appliances Group China, expects China revenue will continue to rise 30 percent for this year on the strength of demand from rural areas.

"The country is developing in rural areas and people are seeing their living standards increase," Gerke said.

Prices raised

Considering the surging cost of raw materials, energy, transportation and distribution over the past few months, the company is stepping up efforts to trim its processes and optimize its cost-effectiveness, Gerke added.

The largest international home appliance maker in China has raised its product prices by 3 to 5 percent this year.

Industry analysts said the rising costs will squeeze many small manufacturers out of the market and help boost the market consolidation.

Midea Group, one of China's leading home appliance makers, spent 1.68 billion yuan (US$240 million) to take over smaller rival Wuxi Little Swan Co Ltd in March after seeing costs rise 10 percent.

Huang Xiaoming, director and vice president of Midea, said it would be a good opportunity to quicken expansion with a broader product mix.

Midea, which had sales of more than 50 billion yuan in the home appliance industry last year, also predicted 30 percent growth this year.

Last year, total sales of home appliances in China rose 28.24 percent to hit a record high of 595.3 billion yuan, according to the China Household Electrical Appliances Association.

(Shanghai Daily April 18, 2008)