Air-con costs to rise in face of subsidy cuts, summer
- Source: Global Times
- [10:17 June 02 2010]
- Comments
A staff member checks price tags at Suning's Yindu Road store in Minhang district Tuesday. Photo: Li Xiang
By Li Xiang
Electronics retailers in the city are trying to keep down the prices of air-conditioner units, despite Tuesday's cut in national subsidies and pressure from suppliers to raise prices in the run-up to the peak summer sales period.
The Ministry of Finance and the National Development and Reform Commission slashed subsidies on energy-saving air-conditioners by as much as 70 percent starting from Tuesday. However, smaller subsidies offered by the Shanghai government will last until May 31, 2011.
The national subsidies are now worth between 150 yuan ($21.9) and 250 yuan ($37), depending on the type of unit purchased, compared to the previous range of 300 yuan ($44) to 850 yuan ($124). The Shanghai subsidies remain at between 100 yuan ($15) and 150 yuan ($22).
Many home appliance chains in Shanghai have said that they will not immediately increase the prices of air-conditioners to reflect the new subsidy rates.
"Although the national subsidies have been reduced, we will offer air-conditioners at similar prices to before, depending on how energy-saving they are," said Suning's manager of media relations in Shanghai, surnamed Yao.
Yongle, a Shanghai-based home appliance chain, also confirmed that they are offering various types of promotions on air conditioners to cushion the impact of the reduced subsidies when contacted by the Global Times Tuesday.
Despite the discounts, the prices of air-conditioners are likely to rise as demand increases. Manufacturers have already notified major retail chains, including Suning, Gome and Yongle, of their intention to raise prices in the near future.
"By how much prices will be raised is still a mystery," said a member of staff surnamed Li at Suning's Yindu Road store Tuesday. "We have a meeting with a supplier tomorrow, when they will confirm their price hikes with us," she added.
However, the price rises will have no effect on residents who bought their units early enough to take advantage of the government subsidies.
"I bought one standing and one wall-mounted air-conditioner for my new apartment in late May, right before the na-tionwide subsidies were cut," an office worker surnamed Wang said. "Air-conditioners are an indispensable home ap-pliance, especially in Shanghai, where the sweltering heat of summer is intolerable. Sales levels can't possibly be affected by the price," he added.
Another resident surnamed Guan, who has been browsing a Gome store in Yangpu district for the past three days in search of a suitable air-conditioner, said he was prepared to put off his purchase until after summer if the prices did go up.
