Turkish White Goods Industry Maintains Its Strength with the Vitality in the Domestic Market and the Stability in Production

According to the evaluation of the Turkish White Goods Manufacturers Association (TURKBESD) in the first quarter of 2024 While the white goods industry recorded a 28% increase in domestic sales, it experienced a 5% decrease in exports. TURKBESD President Gökhan Sığın, Consumption power in the domestic market should be protected in order to prevent the production and employment structure in the white goods sector from deteriorating; He noted that reducing the cost pressure on the sector and complying with the EU’s green and digital transformation policies will have a positive impact on exports.

Turkish White Goods Manufacturers Association (TURKBESD) made an evaluation of the sector in the first quarter of 2024. According to the information shared by TÜRKBESD, which includes domestic, international, importer and manufacturer companies such as Arçelik, BSH, Dyson, Electrolux, Groupe SEB, Haier Europe, LG, Miele, Samsung, Versuni (Philips) and Vestel; In the first three months of 2024, domestic sales increased by 28% compared to last year. The decline in exports in the white goods sector continued and decreased by 5% in this period. In the first quarter of 2024, total sales consisting of exports and domestic sales for six main products amounted to approximately 8.3 million units and increased by 5% compared to last year. In parallel, the production amount remained similar, increasing by 1% compared to the previous year. According to monthly data, there is a 24% increase in domestic sales this March compared to March last year. While production decreased by 3 million units by 2% compared to March last year, the downward trend in exports continued at 11% this month.

“Cost pressure on the sector has a negative impact on export competitiveness”

TÜRKBESD President Gökhan Sığı said, “Turkey’s white goods industry is the largest production base in Europe and the second largest in the world. Our industry is an important actor with a production capacity of 33 million units and an export capacity of 23 million units. While providing direct employment to 60 thousand people, it competes with the world with its R&D, digital transformation and green transformation investments. We have a strong, exemplary collaboration with our sales and service network of thousands of SMEs and our auxiliary industry, of which we are proud. “Thanks to this strong ecosystem we have created, we continue to be an important driving force in the growth of the Turkish economy,” he said.

Noting that total sales consisting of exports and domestic sales for six main products amounted to approximately 8.3 million units, increasing by 5% compared to last year, Sığa continued: “One of the most critical issues for our industry to maintain its competitiveness is cost pressure. Especially the high increases in Recovery Participation Share (GEKAP) type practices, which directly affect the cost, negatively affect our sector in this period. “The fact that GEKAP amounts have increased 10-fold since 2020 not only increases unit costs in our industry, but also negatively reflects on export competitiveness.”

Applications that make shopping difficult bring the risk of contraction in the domestic market

Stating that exports have decreased continuously in the last two years and that they foresee that this trend will not change in the short term, Gökhan Sığın stated that the sector showed a stable trend in the domestic market despite the contraction in global markets and added: “The main reason for the decline in exports was the contraction in global markets. On the other hand, we continue to maintain our production and employment levels with the strength we receive from the domestic market. At this point, it is of great importance to maintain the vitality of the domestic market. This is only possible if our consumers have the purchasing power of white goods, which are a basic need.”

Pointing out that practices such as reducing the number of credit card installments and increasing loan interest and commission rates, which have been on the agenda recently, pose a risk for the domestic market, Sığa said, “A further decrease in the 9 installment limit to which white goods used for an average of 10-12 years is currently subject will have a negative impact on the consumer side.” . This situation will lead to a contraction of the domestic market. “This brings to the fore the deterioration of the production and employment structure for the white goods industry, which compensates for the difficulties encountered in exports with the power of the domestic market,” he said.

Energy efficient products contribute to the welfare of Turkey and consumers

While conveying the value distribution on the basis of exports, Gökhan Sığın stated that Europe is still one of the main export markets and emphasized that the technical and legal infrastructure of our country continues to develop in terms of compliance of products with EU standards. Stating that it is important for the sector to update the national legislation to include the EU’s green and digital transformation policies, Sığa stated that they think such revisions will have a positive impact on exports and concluded his words as follows: “We want energy efficient products to become more widespread in Turkey. This not only protects our country’s resources, but also provides savings to our consumers. “Increasing the use of energy efficient products is of great importance for the existence and continuity of our industry, as well as for the welfare of our country and our consumers.”

“A mechanism should be established for the transfer of environmental revenues to green transformation and technology.”

TÜRKBESD Deputy Chairman of the Board of Directors Fatih Özkadı He also touched upon the increasing cost pressure on the sector due to the Recovery Participation Share (GEKAP) application, which started in 2020 within the scope of the Environmental Law. “GEKAP has now become a burden, like SCT, that increases cost pressure on the sector. The current GEKAP unit fee is 10 times the unit price in 2020. For example, the GEKAP fee paid in 2020 for a 90 kg refrigerator increased from 27 TL to 270 TL, and for a 70 kg washing machine from 17.5 TL to 175 TL. “It is critical to review the GEKAP costs and make the necessary revisions in the Environmental Law,” said Özkadı, pointing out that all supports, incentives and practices should be handled with a holistic view. Özkadı continued his words as follows: “In the perspective of long-term goals for the protection of our country and the environment, a mechanism should be established as soon as possible to ensure that the revenues from environmental practices are transferred to green transformation and energy efficiency projects and technology development on the basis of the relevant sector.”

Özkadı also implemented the Inward Processing Regime, which allows the goods temporarily imported to Turkey and processed to be re-exported after processing. of the promotion He mentioned that (DIR) made a great contribution to Turkey’s exports. Özkadı He continued: “Competition in the EU has become very tough as Chinese white goods manufacturers have reached a significant market share in the EU market after the pandemic. “Especially if the use of DIR in steel raw materials is removed or restricted, it is possible that our competitiveness in the international arena, especially in the EU, will face serious problems, as it will cause the costs in steel raw material supply to increase by around 15-20%.”

“Any change in flat steel products directly affects the industry”

Regarding flat steel products, one of the important basic inputs of the sector, TÜRKBESD Board Member Mehmet Yavuz said: “Raw material costs vary due to the international conjuncture. This reduces predictability, leading manufacturers to make more cautious purchases. Our country’s hot flat steel production may be insufficient to meet the domestic market demand. The import channel must remain open in order to supply flat sheet in a sustainable manner. Because instability in production is unthinkable for our sector.” Stating that the cold rolled sheet used in the sector is produced from hot flat steel and therefore, any change in hot flat steel products directly affects the sector, Yavuz said, “Recently, different trade policy defense tools for steel products have continued.” said.