Decline in Home Appliance Exports Continues
Foreks - The Turkish White Goods Manufacturers Association (TÜRKBESD) has shared its evaluations regarding the sector for the first nine months of 2024. According to the information provided by TÜRKBESD, which includes domestic, international, importer, and manufacturer companies such as Arçelik, BSH, Dyson, Electrolux, Groupe SEB, Haier Europe, LG, Miele, Samsung, Versuni, and Vestel, there has been a 4% increase in domestic sales across six main product groups in comparison to the previous year during the first nine months of 2024. However, the long-standing downward trend in exports reflected a 6% decline in the same period compared to last year, leading to a 3% decrease in total sales and a 4% decrease in production volumes compared to the previous year.
Analysing monthly data, a contraction of 15% was observed in the domestic market in September, while the ongoing decrease in exports reached 34% in the same month. This contraction in both domestic and foreign markets was mirrored in production, which saw a 37% drop. Turkey's white goods industry holds the position of the largest producer in Europe with a 7% production volume share and is the second-largest globally, boasting a production capacity of 33 million units and an export capacity of 23 million units. TÜRKBESD President Gökhan Sığın stated that the sector competes globally with investments in R&D, digital transformation, and green transition, providing 60,000 direct and 600,000 indirect jobs.
Sığın, expressing concerns about the permanence of the decline in production levels, stated, “We believe that this bottleneck can be overcome with an action plan beneficial for our country, our consumers, and our sector. Our industry is increasingly introducing products that provide more energy savings every day with the evolving technologies and innovations. These products protect not only natural resources but also consumers' wallets.” He also shared the results of a recent study regarding the use of energy-efficient products: “According to our study, if current market conditions continue, the replacement of refrigerators with more energy-efficient next-generation devices over the next 10 years would amount to a savings equivalent to two years of production from the Keban Dam. In other words, the annual electricity consumption of 4.3 million households could be saved.”
Highlighting the benefits of widespread adoption of energy-efficient products for the conservation of natural resources and support for production and exports, Sığın stated, “In this context, we believe that any incentives that facilitate consumers' access to energy-efficient products will contribute to national wealth.”
Focusing on areas of digital transformation is necessary, Sığın noted that the European market continues to be the main export market, and the sector's high global integration necessitates a focus on investments in green and digital transformation. Emphasizing the importance of updating national legislation to encompass EU regulations, he stated that such revisions would contribute to the sector's exports to EU countries and positively affect export figures. Sığın added that it is crucial to reconsider practices that put cost pressures to enhance the sector's global competitiveness and that approaches protecting consumer purchasing power and export competitiveness will support the industry's growth.
TÜRKBESD Vice Chairman Fatih Özkadı highlighted the challenges faced by Turkey's white goods sector in the global market and the goals for sustainable growth. He noted the pressure from the high production capacity of manufacturers in the Far East on the sector's exports, saying, "We are working in line with our sustainability and green transformation goals, but the cost advantage gained by Far Eastern manufacturers through government support limits our competitiveness."
Özkadı emphasized the serious burden posed by rising labor, energy, and raw material costs on manufacturers, stating that supporting exporters is critical for the country's sustainable economic growth. Addressing the need for government support, he said, “Protecting the gains within the Inward Processing Regime (DİR), increasing SGK premium support, and ensuring appropriate financing conditions will increase our exporters' competitiveness.”
Mehmet Yavuz, a TÜRKBESD Board Member, shared the impacts of anti-dumping investigations on steel, a primary input for the sector. “While protectionist policies in our country grow the steel industry, they fail to contribute as expected because of the high costs they create for end producers in the domestic market,” Yavuz said, noting that the anti-dumping investigation on hot-rolled flat steel products from China, India, Japan, and Russia, recently concluded with high definitive measures, will directly affect the sector. He also mentioned that investigations regarding stainless steel products are ongoing, stating, “If a new sanction arises from the anti-dumping investigation, there will be an increase in product costs in many sectors consuming stainless steel. Consequently, this will adversely affect employment and our global competitiveness within the sector.”
Similarly, Yavuz pointed out that any additional tax on polystyrene, an important input material for white goods, would negatively impact product competitiveness and exports. “These materials cannot be sourced from producers in Turkey due to their technical requirements,” he said, indicating that any tax added within the investigation framework for these materials, which have a significant portion in product costs, will reflect on product pricing and indirectly contribute to inflation increases.
TÜRKBESD Board Member Semir Kuseyri expressed concerns about another pressure factor on costs, the Recovery Participation Fee (GEKAP), which negatively impacts the vibrancy of the domestic market and constrains the sector's growth potential. Kuseyri remarked, “In particular, as of 2023, the GEKAP fee increases, which are implemented at higher rates than the PPI and CPI growth rates, have created additional pressure on companies' cost structures. Indeed, while the unit prices applied in 2020 have increased by about 900% as of September 2024, the increases in PPI and CPI have occurred at rates of 544% and 400%, respectively.”
The white goods sector creates a vast ecosystem through its production, sales, and after-sales services, with over 3,500 authorized service providers operating across Turkey. Kuseyri noted a significant problem within the sector of individuals misusing the designation of authorized service providers, which results in consumer dissatisfaction. He emphasized the importance for consumers to use official brand websites and the service.gov.tr site prepared by the Ministry of Trade instead of search engines for accessing service services, stating that these steps are vital for safe and trouble-free service acquisition.