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The recent release of Consumer Appliances 2013 research offers insightful growth trajectories for the various regional markets. While Asia Pacific remains the biggest regional market for sales and unit production in 2012, due largely to China’s dominance, its year-on-year growth is slowing down. China is projected to expand by only 2% in volume terms in 2012, as compared to 8% in 2011. Expiry of the Chinese Government stimulus of appliances will see Asia Pacific yield highest growth status to Latin America. Bolstered by continued strong performance in Brazil, Latin America will emerge as the top growth region in major appliances, with sales up 9% in 2012. This is followed by Eastern Europe and then, Asia Pacific.
In terms of product categories, large cooking appliances contribute significantly to the robust growth of Latin America. The demand for oven and built-in hobs as replacement units as well as units fitted into new households has grown tremendously, both by over 30% in 2012. Notably, Brazil is helping drive growth here, accounting for some 70% of oven volume sales within the region.
Latin America is also the largest producer of cookers and range cookers, accounting for 40% of global production volumes, where Brazil and Mexico collectively produce 87% of cookers and range cookers within Latin America. While Controladora Mabe SA de CV and Whirlpool Corp control 45% of total production of large cooking appliances in Latin America, other manufacturers like Electrolux AB and LG Corp are aggressively increasing their production presence within the region.
Eastern Europe also recorded strong expansion in production sites in 2012. Tracking of production volumes of major appliances and air conditioners reveals that Eastern Europe will lead global growth, up 9% in 2012. Production of dishwashers and refrigeration appliances here will post double digit growth. Poland is fast emerging as a popular production site, recording growth of 15% in 2012, due to its geographic and cost-saving advantages. Korean manufacturers such as Samsung Corp and LG Corp are expanding their production in the region rapidly, with the intention of growing brand presence within this underdeveloped region. Having commenced refrigeration production only in 2011, Samsung Corp increased its production volume from 0.3 million to 0.8 million units within one year alone. Furthermore, production volumes of Korean appliances manufacturers in home laundry appliances collectively will grow by 116% in 2012, while other manufacturers are lagging behind.
While global manufacturers will not be keen to pass up on the immense potential offered by the Chinese market and as well as to further penetrate into other undeveloped pockets within Asia Pacific such as Vietnam, Indonesia and Philippines, it remains a fact that they have to still contest keenly with the dominance of Haier and Midea in China as well as the other Korean and Japanese brands prevalent in the Asian markets. Latin America and Eastern Europe offer lucrative growth opportunities, with Euromonitor International projecting forecast volume CAGRs of 6% and 4% in major appliances for Latin America and Eastern Europe, respectively.