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LCD tariff resume 5%, bring pressure on domestic TV producer

Date:2012-03-30 Text Size: BigMiddle Small

 

Reporter: Wu Wenkun, Beijing

The long rumored raise of import LCD panel tariff in the industry finally became true.

Ministry of Finance, yesterday, Mar. release the news of notice for adjustment of some commodities’ import customs duty.  From Apr. 1, 2012, four temporary of imported commodities have been adjusted, including that 32” and above 32”no back light LCD panel’s customs favorable import duty of 3% has been cancelled and resume to 5% instead.

From the professional view, the adjustment will be in favor of domestic panel manufacturers, and make oversea panel industry move to China further. However, due to low profit margin, domestic color TV producers will bear the big pressure. Vice president of BOE, Zhang Yu, considered believes original 3% import duty is low and good for decreasing cost during the period of no domestic LCD production lines, but on current situation, increasing the LCD panel import duty will stimulate TV producers to purchase domestic panel for releasing BOE, and CSOT’s operation pressure.

“BOE, and CSOT’s panel production capacity are limited and their quality is still climbing.”by All View Consulting’s vice president, Jin Xiaofeng when interviewed by Daily Economy News. “with increase of production and improvement of quality, tariff adjustment will affect the industry of domestic LCD panel in next half year obviously.

The professional persons believe that up-adjustment of customs duty will benefit domestic LCD panel producers. But specialist of family appliance, Liu Buchen, commented that BOE, and CSOT, and other domestic supplier’s capacity cann’t be easily increased in short time, and it’s difficult to say that the cost-effect of domestic producer will be better than foreign supplier if domestic producer has enough production capacity.  
According to relevant data, in Jan. 2012, the price for 32” LCD is USD127, and 42” is USD210, the cost of these two LCD will increase RMB16.3 and RMB26.9

separately if the customs duty increases by 2%.

“A key question is that who is going to digest the 2% up tariff.” Skyworth Group spokesman, Li ChongXiang brought forward the question when interviewed by Daily Economy New yesterday. He believes that it will surely increase the cost of domestic TV producer, if LCD suppliers do not abate the prices.

“The TV producers will face two options: to reduce the profit margin, or to raise the price and transfer the impact of the tariff hike to consumers.” According to him, in 2010, the average net profit of the TV producers was only 2%, they will face the big pressure if they need to absorb the tariff increase of 2%.