# ODM Model

The Price Butcher’s Blunt Blade: Aux and the Crisis of China’s Low-Cost Model

Aux Electrical, once the dominant low-cost disruptor in China’s air conditioning market, is facing a severe profit crunch as its 'Price Butcher' strategy fails to combat rising raw material costs and technological stagnation. Despite a 2025 IPO, the company’s reliance on low-margin ODM sales and a lack of R&D investment has left it vulnerable to more integrated competitors like Xiaomi and Midea.