The home appliance industry has been around for over 80 years with a diverse range of products in energy-intensive and non-energy sectors. Iran’s home appliance industry is known as one of the industrial advantages and has the ability to compete in international markets. This industry has a large capacity for job creation and available resources to produce wealth. The size of the home appliance market is 6.37 bn USD, with 4.78 bn USD available to foreign brands. At present less than 10 foreign brands hold 75% of the home appliance market, while around 600 domestic factories, of which at least 30 are higher brands, account for 25% of the market. In fact, 4.78 bn USD of home appliance market are owned by 10 foreign brands while 1.59 bn USD are possessed 600 domestic factories, because conditions are more appropriate for them than domestic producers. By studying the markets of neighboring countries and the importance of regional markets, Iran has been identified as the largest market for household appliances in the region, accounting for 15% of the market size of the Middle East region.
Smuggling in home appliances has risen by 161% i.e. from 11 mn to 30 mn units, in the year ended March 2017. According to statistics in the year ended March 2017, more than 1.2 domestic appliance have been imported for each households because of 24.2 mn households live in Iran.
– Increasing the production of television, refrigerators, washing machines and evaporation air cooler in the year ended March 2017.
– Signing a cooperation agreement between Butane Group and German Bosch, a contract based on which some Bosch products are manufactured and supplied in Iran market
In the year ended March 2017, various types of produced flat TV grew by 7% year on-year, reaching 1,495,000 sets. The refrigerator produced 889,000 sets in the year ended March 2017, indicating a 10.6% reduction in production compared to year-ended March 2014. Washing machines production had growth over 75% in the year ended March 2017, evaporation air cooler increased by 5.7% to 723,000 units.
Home appliances import was 652.4 mn USD declining 37% in the year ended March 2017 compared to the previous year. Air conditioners have the largest share of home appliance import with 39.3% .
Home appliances export in Iran has had a fluctuating trend over the past years and in the long run, export growth has not been impressive in these years. Household appliances export in the year ended March 2017 was 245.3 mn USD which grew 19% year-on-year. Evaporate air cooler, with a 78%, have the largest share of home appliances export.
The internal refrigerator requirement is estimated at around 2.5 mn devices, of which about one mn units are domestic and the rest are supplied through import. Given skilled labor force and the serious barriers to production are eliminated, the ability to produce is higher and, as a result, the domestic demand is provided.
South Korea, Turkey, the UAE, China and India were the main refrigerators exporters, in the year ended March 2017, refrigerator import followed more than threefold a growth rate of more than threefold, from which 38.5 mn USD was imported in the year ended March 2016 to 144 mn USD in the year ended March 2017. South Korea is the main exporter of refrigerator to Iran.
Refrigerators are among the goods which, in addition to being used domestically, are also exported. The export value of these items has been steadily rising over the past years az the export of refrigerators has risen from 1.2 mn USD in the year ended March 2008 to 9 mn USD in the year ended March 2017. Of course, the peak export is considered to be the year ended March 2016, which is twofold higher than the previous year, with export value of 13 mn USD.
Afghanistan, Iraq, Tajikistan, Kenya and Azerbaijan are the target countries for refrigerators in the year ended March 2017, which compared to the markets of year ended March 2016 the countries such as Turkmenistan and the United Arab Emirates have given their place to Tajikistan and Kenya.
unfortunately, the lack of production data in this sector is one of the main problems. Most of the kitchen stove manufacturing units are located in Tehran, Karaj, Isfahan, Tabriz, Yazd, Saveh, Mashhad and Damavand industrial towns.
The amount of kitchen stove import in the year ended March 2017 compared to the previous year experienced a significant growth of about 277%. The largest share of stove was from Italy, with 50% of the total import of gas stoves.
In recent years, kitchen stove gas export have continued to grow, rising to 17.7 mn USD, in the year ended March 2017. While the export volume in the year ended March 2016 was 14 mn USD. The main destination of the kitchen stove was Iraq in the year ended March 2017.
Evaporative Air Cooler
the production of evaporative air cooler is about 800,000 items and the most evaporative air coolers are produced in the cities of Qazvin, Shahr-e-Kord and Tabriz.
Import of evaporative air cooler has not followed a trend in recent years, as Iran imported evaporative air cooler for 0.3 mn USD in the year ended March 2017, similar to the previous year. Italy is the most importing country for evaporative air cooler in the same year.
In the past years, the export of evaporative air cooler has been able to gain foreign currency, which in the year ended March 2017 totaled 147 mn USD. Iraq is the main destination for export of evaporative air cooler with a 93% share.
- New world technologies in some products
- Production of a huge amount of raw materials and components
- Specialized staff in the field of electronics, mechanical engineering etc.
- Low competitiveness in the industry due to high cost and low quality of after-sales services.
- Insufficient systematic approach to increasing quality and lowering prices
- No strategic vision of units to the need in achieving production and secure export markets
- Lack of innovation, creativity, research and development and advanced technology and high percentage of waste
- The lack of advanced technology for this industry and the buyer’s desire to the advanced technology
- Limited target markets scope
- Lack of foreign investment for the transfer of superior technology
- Lack of specific export strategy
- Non-standardization of export commodity by the standards of target countries
- Reputable companies export low quality products
- Potential markets in neighborhoods such as Afghanistan,Iraq,Armenia, Tajikistan
- Increased market demand, due to the rise of social welfare and the urbanization development
- Ability to attract expert and efficient human resources
- Easy access to energy resources
- The existence of a large home appliances market
- Import the high volume of similar products, illegal and quasi-legal
- Inadequate infrastructure for industrial export development
- The cultural weakness in using domestic decent quality products
– Low-power ventilation packages
– Air-conditioning devices
– Low power consumption chillers
– Absorb-er Solar Coolers
– Direct drive washing machines
– Solar Water Heater
– Vacuum tubes for solar water heaters
– Absorb er low-consumption gas cooler
Home appliances industry in Capital Market
The shares of companies active in home appliance industry are traded under the name of the Machinery and Equipment Group in Iran capital market. The group with a market value of 472 mn USD accounted for 0.47% of the market value of capital. The P / E ratio is 8.12.