Baxi plans to double market share

Baxi Romania, the local branch of the British heating systems producer Baxi, forecasts sales of 30,000 heating systems for 2005, which will see it almost doubling its market share in Romania from 9.3% to 17.6%.
Baxi Romania was established in February 2004 through a joint venture between Westen Termo Romania and Baxi Overseas Ltd, a member of the Baxi group.
Baxi Romania expects this year’s turnover to reach some 6 million euros, giving it 9.3% of the market. The company’s two brands will see fairly similar sales figures at 16,000 units for the Baxi brand and 14,000 for Westen. The heating systems market was estimated at 160-190 million euros last year.
The market declined steeply this year, however. Sever Scarlat, the company’s chief executive, says the market was hindered by the restrictive policy of the authorities in respect of heating systems, making it harder for people to disconnect from the centralised system due to high costs and excessive red tape, and at the same time harsh regulations were imposed on service companies.
Baxi believes these restrictions led to a 40% decline in the market for heating systems. Equipment sales fell from 255,000 units in 2003 to 145,000 units. Baxi was the first company to introduce lifetime warranties for its heating systems.
From total sales on the domestic market, Baxi has a 9.3% market share, according to its own estimates, with 13,500 units sold. The best-selling Baxi heating systems are from its Westen brand (7,500 units), followed by the Baxi brand (6,000 units).
Baxi initially estimated a 12-15% market share for this year from forecasted sales of 30,000 units. This target was postponed for 2005, however, by which time market share will have increased to 17.6% compared with the July 2004 estimates.
Top producers and importers of heating systems include Vaillant Hepworth (Vaillant, Protherm, Saunier Duval and Hermann), Immergas, Ferroli, Merloni (Ariston), Bosch and Kober (Motan), of which Kober is the only domestic manufacturer. Most of these companies saw their sales decline compared with 2003 due to the overall decline in demand.
georgiana.stavarache@zf.ro