中国：耐用品消费正从顺风转向逆风- China_ Durable goods consumption is shifting from tailwind to headwind

Summary of Key Points from the Conference Call Industry Overview - The conference call primarily discusses the durable goods consumption in China, focusing on the home appliances and automobile sectors, highlighting a shift from growth to decline in sales due to various economic factors [1][2][3]. Core Insights and Arguments - Durable Goods Sales Growth: - China's durable goods sales growth has significantly slowed, with home appliance retail sales expected to drop to -20.0% year-on-year in Q4 2025 from an anticipated 14.2% in Q3 2025 [1][3]. - The automobile sector is projected to experience a more modest slowdown, with sales revenue growth impacted by the reinstatement of purchase tax on electric vehicles starting in 2026 [1]. - Impact of Trade-in Program: - The home appliance sector benefited from a government trade-in program, which provided 15-20% discounts and a subsidy cap of RMB2,000 per item. This program has led to a surge in sales growth, but the momentum is now reversing [2][3]. - Home appliance sales growth surged from 3.4% in August 2024 to 33.6% in Q4 2024, but slowed to 14.3% in August 2025, indicating a significant decline [2]. - Production Plans as Leading Indicators: - Factory production plans from China Industry Online (CIO) indicate a downward trend in production for major appliances, with air conditioner production plans showing a decline of -11.9% year-on-year in August 2025 [5][12]. - The overall planned production volume for home appliances has decreased from 10.1% in July to -7.5% in August, reflecting a broader slowdown in consumer demand [12]. Additional Important Insights - Historical Context: - Previous trade-in programs have shown a payback effect, where sales growth sharply declined after the program ended. For instance, after the 2009-2011 program, home appliance sales growth fell from 12.3% in 2009 to 7.2% in 2012 [13]. - Market Share of Home Appliances: - Home appliances account for 7% of merchandise sales and 16% of durable goods sales among larger retail enterprises in China, making it a significant sector within the consumer goods market [4]. - Automobile Sector Dynamics: - The automobile sector, which accounts for 26% of China's merchandise sales, has also seen a rebound in sales volume but is beginning to show signs of slowing growth due to the payback effect of the trade-in program [21][22]. - The growth in passenger car sales is expected to slow to 0.0% year-on-year in Q4 2025, with value terms declining from 0.8% in H1 to an estimated -2.0% in Q4 [22]. This summary encapsulates the critical insights from the conference call, focusing on the challenges facing the durable goods sector in China, particularly in home appliances and automobiles, as well as the implications of government subsidy programs and historical trends.