HONG KONG, May 21 /PRNewswire-Asia/ -- The State Council has just announced it will allocate a total of 5 billion Yuan to subsidize consumers for vehicle replacements, up from the original budget of 1 billion Yuan. It would also allot 2 billion Yuan to subsidize consumers to upgrade home appliances. These policies will not only boost domestic consumption, but also help reduce emissions and save energy. They will be first introduced in major cities in China and will set a fast pace for transition from the CRT TV to LCD TV. This coincides with the strategy of TCL Multimedia Technology Holdings Limited (“TCL Multimedia”, or the “Group”, Stock code: 01070.HK) to shift its core business to the LCD TV. With the Group’s strong brand power, extensive experience and leadership in the domestic market, management expects this new policy will create ample opportunities for further business growth.
A pilot programme will be launched in the cities of Beijing, Shanghai, Tianjin, Fuzhou, Changsha, Jiangsu Province, Zhejiang Province, Shandong Province and Guangdong Province to subsidize the replacement of five types of home appliances - TV sets, refrigerators, washing machines, air conditioners and computers. It covers major cities in Bohai Economic Belt, Yangtze River Delta region, Pearl River Delta Region and the upstream and mid-stream areas of Yangtze River, demonstrating the Chinese government’s enhanced efforts to stimulate sales of household electrical appliances. The “Household Appliance Subsidy Scheme” is mainly aimed at boosting demands in the third and fourth tier cities in rural areas, while the subsidy for “Home Appliance Replacement Program is primarily intended to boosting sales in the first and second tier cities. Consumers who hand in used electronic products and buy new ones can get a subsidy up to 10 percent of the prices of new products. The policy is expected to expand into the whole country after the pilot programme is completed. This is beneficial to consumers and home appliance manufacturers, especially the TV and computer segments as they have a much shorter upgrading cycle.
According to Displaysearch, TCL Multimedia commanded a market share of 17.4% in China during the first quarter of 2009. The expanded demand will further boost the Group’s overall TV sales, especially those of new product lines. Furthermore, a total of 30 TV products of the Group were selected as the subsidized items during the third phase of bidding under the “Household Appliance Subsidy Scheme”. Among the 30 selected TV products, 22 are LCD TV models, accounting for over 70% of the Group’s total bid. The subsidy program for household appliance replacement introduced by the Chinese government is aimed at stimulating consumption and expanding domestic demand through financial subsidies. It is the extension of the “Household Appliance Subsidy Scheme” and both programs are supplementary to each other. TCL Multimedia has been working closely and coordinating with the government to achieve best results of the programs by enhancing its publicity efforts, sales management and after-sales service.
TCL Multimedia maintains its core competence in technological enhancements, industrial design and environmentally friendly technology. The Group has continued to develop environmentally friendly technology. In fact, its proprietary technology - “Natural Light”, which was successfully developed by the Group in early years, enables LCD TV to use 50% less energy and is a good example of the great achievements of its green technology. With the government calls for lower emissions and carries out measures to drive domestic demand, we believe TCL’s environmentally friendly products will be more competitive in the TV market.
About TCL Multimedia
TCL Multimedia Technology Holdings Limited is one of the largest TV manufacturers globally and its products are sold all over the world. Headquartered in China, TCL Multimedia operates its manufacturing plants and R&D centres across all major continents. The Group’s largest shareholder is TCL Corporation.
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