Foreign flat-screen TV makers on price war in China market
Foreign makers of flat-screen TVs have slashed retail prices since the second quarter of this year, resulting in a fierce price war amid declining profits among domestic brands.
On one popular electronics website, the battle among high-definition sets was clear Thursday.
A 42-inch Philips LCD TV price at 5,999 yuan ($892) is now 4,399 yuan ($654) - a 27 percent drop. Not to be outdone, Sharp 40-inch LCDs were selling at a 28 percent discount of 4,499 yuan ($669), as opposed to the regular price of 6,299 yuan ($937).
Similar cuts were being made on domestic brands, and a 42-inch Skyworth LCD was being sold for 3,999 yuan ($595), down from 4,799 yuan ($714) - a 16 percent cut.
And a 40-inch Konka LCD cost just 3,699 yuan ($550), from 4,490 yuan ($668), marking a 17 percent drop.
Gu Wenjun, an analyst for market research firm iSuppli, told the Global Times Thursday that the lower price tags on foreign brands could be attributed to the fact that most local producers don't have advanced LCD technologies.
Therefore, domestic manufacturers are dependent on imported LCD panels, which make up about 60 percent of a TV's costs.
Meanwhile, foreign producers such as LG and Sharp are gradually shifting production to China and investing further into advanced technologies.
Ma Cong, content director for www.cheaa.com, the website of the China Household Electrical Appliances Association, said foreign producers are turning to China for parts manufacturing to "help reduce logistical costs .. and therefore can offer lower retail prices."
However, iSuppli's Gu pointed out that some Chinese producers started setting up panel factories last year.
In April 2009, BOE Technology Group fired up its first LCD panel production line in Hefei, Anhui Province.
BOE has some advanced LCD-manufacturing capabilities, as do industry rivals Changhong and TCL Corp.
"It will take years to know (actual) production volume (of the Hefei line), but by that time, these technologies could see them lagging far behind foreign players," Gu said.
TCL Corp released its third-quarter fiscal report a week ago, showing sales revenue at 35.3 billion yuan ($5.25 billion), up 18.43 percent, year-on-year. But the company's TV-production unit reported a big loss of $147.36 million.
