JARN estimates China’s air conditioner market decreased by 8.7% year on year in 2015, suffering sharp decline. Demands on RACs were lower than the previous year. PACs also confronted shrinking demands.
Large inventory of RACs and PACs was a big challenge which takes a long time to digest. Manufacturers reconsidered their production plan and air conditioner production reduced by 20% in March 2016.
Currently, penetration rate of air conditioner is still low in China. As estimated by China Market Monitor, a household in urban area owns 1.7 units of air conditioners while a household in rural area owns 0.6 units. There is still a huge growth potential in rural market.