Twelfth Five Year Plan to Drive Rapid Growth in China’s Smart Meter Market – Quality Concerns Loom Large
GCiS China Strategic Research has published a study of the China market for electric smart meters. The study estimates an RMB 10 + Bn market with growth rates in excess of 25% last year, driven by grid purchases. High volume and low price purchases have raised concerns about the quality of some smart meters.
Growth is driven by the State and Southern Grids' smart meter purchase programs and the nation’s Twelfth Five Year Plan that will see over 80 million smart meters installed in Chinese homes by 2015 and the adoption of smart metering across commerce and industry. When replacement purchases are factored in, the total installed base could well exceed a quarter of a billion units by 2020.
Amid such staggering growth rates, smart meter suppliers have been racing to expand their factory capacities. “The average smart meter supplier in China is at two-thirds capacity, which would have alarm bells ringing most other markets,” said Edward Barlow, senior analyst and author of the study. “But in China they’re looking at real growth of 17 to 20 percent per year for the next five years.” The study, which surveyed around 75 key players, finds that total capacity is expected to increase by 30 percent by 2012.
However, the State Grid, which is currently looking for RMB 60 billion in short term loans, has reportedly compressed smart meter pricing much lower than many suppliers can accommodate. As suppliers rush to the bottom of the cost curve, meter accuracy and lifespan are being sacrificed.
“The Grid companies account for two out of every three Renminbi spent in the market and they have been asking their suppliers for lower and lower costs per meter,” Barlow added. “This is putting enormous pressure on producers.”
About the GCIS China Smart Meters Market Study
This GCiS market study (http://www.gcis.com.cn/Research/Smart%20Meters.html) draws on a three month, in-depth primary survey of around 75 of the market’s supply side, channel players and end-users. It is essential reading for any professional needing accurate and detailed strategic information on this market. Major areas covered include: market size and shares, five-year projections, market structure, pricing trends, distribution, consumption, an assessment of key suppliers and more.
About GCiS China Strategic Research
GCiS is a China-based market research and advisory firm focused on business to business markets. Since 1997, GCiS has been working with leading multinationals such as Siemens and GE in sectors ranging from technology to industrial markets, medical, chemicals, resources, and a few others.
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