The soaring sales of heating systems on the Romanian market, which had surged 70% by the end of last year according to the estimates of market players, came to an abrupt end early this year, under pressure from local heating companies. The heating systems market, with sales of between 160-190 million euros last year, is expected to drop in 2004 for the first time in recent few years, since consumer access to the heating independence provided by these systems has been greatly restricted.
Importers and producers of heating systems have seen their sales dive, with results even being halved in some cases.
Hornoff Trade Consult, importer of the Vaillant boilers, has seen its sales fall 40% in the last three months. In its turn, the producer of Motan heating systems, the Kober Group, has failed to reach its 4 million-euro target for the first half of the year. Moreover the Kober Group, through its heating systems division, had made investments to triple its production capacity, expecting sales to keep growing. Instead it has witnessed their tailing-off.
Most of the big players admit that they had earlier forecast the sustained growth of sales of heating systems when drafting their budgets for this year, and now have to adjust their targets. The same companies have also invested millions of euros in advertising to promote their products.
These significant falls in sales after four years of uninterrupted growth have been triggered by the “obstacles” created by certain “interests”, says Klaus Hornoff, chairman of the Association of Producers and Importers of Heating Systems (APICT). The organisation comprises about 25 manufacturers and importers, such as Buderus, Ferroli Romania, Hornoff Trade Consult, Immergas, Kober, Romstal, Secpral Pro Instalatii, Viessmann Romania and Western Termo.
It’s a situation also being confirmed by retailers.
“Last year, the sales of heating systems were high (partly due to the availability of payment by installments), but this year customers have to cope with more red tape from the authorities, causing many people to give up their plans of having a heating system installed. We did have a good period this year, in spring, but for now people are confused and sales are not advancing,” say officials from the Altex store network.
Sales of heating systems on the Romanian market are estimated at some 218,000-220,000 units, according to market surveys.
One of the companies has already employed a law firm to study the current legislation and to notify the Competition Council of a potential anti-competition move from the local heating companies.
“We only want the competition system to be fair on this market. The gradual elimination of subsidies for heating, which has been announced by the authorities, is only a first, but small step towards a normal situation… We offer an alternative to the centralised system, which is bankrupt, and are competing against an entity that currently has all the power,” said Olimpiu Achim, deputy chairman of APICT.