Domestic Appliance Production Surge in 2022
A dishwasher, washing machine, refrigerator, and oven are indispensable items for the continuation of daily life. White goods products, whose sizes, features, and prices have changed considerably since the first period of their production, are becoming more and more common. Turkey, one of the world’s most important white goods production areas, has succeeded in creating effective brands in the global market in recent years.
Domestic appliance production in Turkey is one of the leading export items with an increasing foreign trade surplus. Turkey exports more than half of the domestic appliances produces by many countries in the world, especially European countries. Turkey, which is the main production base of many local and foreign companies in domestic appliance production, ranks second after China in this field. The sector, which entered 2022 very effectively, managed to increase its export rate.
Domestic Appliance Export Reached 6.5 million Units in the First Quarter of the Year
In the first quarter of 2022, Turkey increased its exports in 6 main white goods groups and exported 6.5 million products annually. In the first quarter of 2022, total sales increased by 2%, while exports increased by 6%. Despite the epidemic, the sector managed to increase its sales in both domestic and foreign trade. So, what is the secret to this success in exports?
Investments, R&D Studies, and Global Brands Lead to Increasing Exports of Domestic Appliance
The white goods sector is constantly receiving investment, as Turkey makes an export-oriented production. Being the second-largest production base in the world after China, research and development studies become widespread. R&D studies are extremely beneficial in terms of achieving global market dominance as well as high-tech and value-added products. The domestic appliances industry is a versatile industry, with employment for hundreds of thousands of people and thousands of sales and technical service points.
Tips on Global Potential in the White Domestic Appliance
It is expected that the domestic appliance sector will continue to grow in the coming years and reach 557 million units and 285 billion USD globally in 2024. So, what are the factors that trigger production? First of all, the increasing prevalence of digitalization made it necessary for the products produced in the domestic appliances industry to keep up with it.
The application of the latest technological products and smart technological applications to domestic appliances necessitates the production of a continuous top model. In this case, the consumer changes his/her domestic appliances more frequently than before to keep up with the digital transformation and to have a more comfortable daily life. Changing consumer demands, the spread of individual life independent of family, and constant relocation increase the demand for domestic appliances.
Rising Steel, Energy, and Oil Prices Affected Domestic Appliance Production
Inflation, which is effective on a global scale, and the raw material supply shortage caused by the Russia-Ukraine war are among the important factors pushing the sector. In addition, the sector is also affected by the increase in flat steel prices. Despite all these developments, Turkey overtook Germany to become Europe’s largest steel producer. Turkey is the 7th largest producer of steel in the world. Steel is an important and strategic raw material not only for domestic appliances but also for almost the entire manufacturing sector. After the trade embargo applied to Russia, countries’ tendency toward steel produced in Turkey stands out in sectoral production.
What are the Sectoral Expectations?
Since steel is a strategic product all over the world, countries can apply various taxes and export restrictions. Steel, which is the raw material of white goods production, experienced difficulty in supply, especially during the covid-19 pandemic. In order to overcome this situation, Turkey resorted to abolishing some taxes. For example, the abolition of the Inward Processing Regime was welcomed by the industry. However, in order for the production to continue without interruption, HRC production should be increased, and other taxes should be abolished.
Turkey World’s Second Largest Production Base
The domestic appliance sector provides employment for 60 thousand people directly and 600 thousand indirectly. Turkey is the world’s second-largest production base in this field, meeting 7% of the world’s white goods production. To put it in numbers, exports in the first quarter of the year increased by 6% compared to the same period of the previous year and reached 6.5 million units. Domestic and foreign sales increased by 2 percent in total to 8 million 688 thousand 496 units.
Asia-Pacific Region and Europe Stand Out as Important Markets
The Asia Pacific region is the region where more than 40% of the world’s domestic appliances sales are realized. Europe, Turkey’s largest market, has a market share of more than 20%. According to the report of Turkish Domestic Appliances Manufacturers, between the years 2019-2024, the production of domestic appliances is expected to increase by 13.1% globally and the sales turnover to be obtained from this production by 15.6%.
