China's rural subsidy program for electronics products is expected to generate sales of over 10 million flat-panel TVs in 2010, according to the China Video Industry Association (CVIA).

Sales in the China's LCD TV market were weaker than expected in the first half of 2010, resulting in high inventory levels. But Lin Yuanfang, VP of the CVIA., said that when the second round of the subsidy program kicks off later this year, inventory levels in the TV market will drop.

The CVIA is more optimistic regarding China's LCD TV market in 2010 forecasting sales of 37-38 million units. Some of the group's individual members predict sales of 33-36 million units for the year.

Lin said the China TV market is heading for a new era where demand for LED-backlit models and Internet connectivity is picking up fast.

China-based vendor Changhong indicated that LED-backlit TV sales in China amounted to only about 406,000 units in 2009 with a 1.6% share of the LCD TV market, but will increase to 5.55 million units with a 15.9% share in 2010, and to 13.36 million units with a 33% share in 2011. The share of 40-inch and larger models will reach over 55% in 2011.

On the manufacturing side, China is expected to produce over 100 million TVs in 2010, of which 80 million will be LCD sets, Lin added.

Source: Changhong, compiled by Digitimes, July 2010