China’s two-way radio industry experienced a slump in 2007, be set by rising manufacturing cost and the yuan appreciation against the US dollar. From about 130 makers in 2007, the supplier base dwindled to about 110 in 2008. Despite the slight downturn, China suppliers are optimistic that output will remain stable in 2008.
However, China companies that transact in US dollars are adopting real-time settlement for US dollar denominated transactions or are asking buyers to convert long-term contracts into shorter term deals to lessen the impact of currency fluctuations. Instead of shipping their products to the US, many suppliers are also turning their attention to export markets such as Europe and Africa, where the product line is still thriving.
The negative external environmentis further aggravated by skyrocketing prices of crude oil and raw materials such as plastic, iron, copper and aluminum. While some China manufacturers have absorbed the higher production costs, many are compelled to pass on the increases to their customers by raising export quotes in the coming months.
The following are some of the key trends that we see in China’s two-way radio industry:
• The majority of suppliers will raise their export quotes in the coming months by up to 10 percent. A number of suppliers, on the other hand, will either keep their prices unchanged or make some modest price cuts.
• Suppliers will focus on developing more durable and reliable products, which includes improving security, anti-interference, housing quality, battery durability and weather resistance. Products will also have higher channel and memory capability.
• EU and Asia/Pacific will continue to be the most important target export markets for many makers. Fewer makers will ship products to the US.
• Capacity expansion plans are underway in the coming months. This is in line with makers’ plans to widen their product range to include more digital models.
The above is extracted from the Executive Summary of China Sourcing Report: Two-way Radios
To learn more about this report, visit: http://www.chinasourcingreports.com/csr/two-way-radios
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