Home appliance importers manage to avoid price hikes

The domestic currency is getting stronger than the dollar and the euro put together by the day. Nevertheless, the retail price in ROL of refrigerators and washing machines has not yet gone down.

The reason is simple: in fact, electrical home appliances have got more expensive in euros because of the higher prices of steel and the other raw materials, but this evolution has been offset by the exchange rate.

Hardly had they regained their momentum after last year’s market dive, that importers and producers of electrical home appliances are now coping with a rise in production costs due to the higher prices of steel, tin plates, plastic or the other raw materials. Being compelled, this year as well, to let go of profits to the end of at least maintaining their market share, importers have received unexpected help, in the form of domestic currency appreciation.

Steel, oil, electrical power, almost all raw materials became more expensive last year, taking many of the world’s producers of electrical home appliances by surprise.

Thus, they had to constantly cut down their profit expectations last year. Starting this year, these producers (Americans, Europeans and Asians) have taken the bull by the horns and decided to raise prices to be able to cover their losses.

“Globally, prices of various categories of electrical home appliances rose by 8-10% on the average. The price of steel and other basic components exploded particularly in the second half of last year, and price increases were felt in the costs of products delivered after January 1st, 2005”, believes Eugen Paturan, a country manager for Romania with the Italian producer of electrical home appliances Indesit Company.

Paturan says he decided that, on the Romanian market, prices of Indesit and Ariston electrical home appliances, produced by the Italian manufacturer, would rise only by about 4%.

“This increase has not been felt in shelf prices, being offset by the appreciation of the Romanian domestic currency against the single European currency. Moreover, in our policy aimed at Romania, we have decided that part of the price raise should be also be compensated from the lower profit margins for this year”, explains Paturan.

A quite similar policy was also embraced by another important player on the Romanian market, Whirlpool Romania, with annual business to the tune of 50 million euros.

Mircea Dobre, general manager with Whirlpool Romania, the importer of the US producer of electrical home appliances for the Romanian market, believes last year’s lower prices of electrical home appliances can be regarded as a special situation against a normal situation of an annual 3-5% erosion. ionut.bonoiu@zf.ro