Owner Of Beko & Hitachi Tips Tough 2024
Arçelik whose Beko operation in Australia took over the Hisense appliance operation has warned that 2024 is going to be a very tough year.
One of the world’s biggest household goods’ manufacturers, whose Beko products are number one in the UK and several other European Countries is tipping that the European market will shrink by a minimum of 5% and up to 10% “If things go bad” chief executive Hakan Bulgurlu claimed this week.
In Australia the business is looking for increased growth after taking over the Hitachi appliances operation, the move gives them a presence in both the premium appliance market with their Hitachi appliances and affordable premium appliance market with their Beko range.
In 2024 the local business is looking to also have a new sales operation in Sydney with their head office remaining on the Gold Coast.
The business that is set to expand their distribution of Beko product in Australia claim that two key issues are impacting consumers worldwide resulting in problems for appliance manufacturers such as Electrolux who many are tipping could be sold next year to Midea as their financial position worsens.
They include rising energy prices, and increased interest rates that are pushing up the cost of borrowings.
“I see headwinds pretty much everywhere at the moment,” Bulgurlu said in an interview with the Financial Times, adding that “it’s increasingly looking very likely that 2024 will continue to be very tough”.
Industry-wide shipments of major home appliances from European manufacturers fell 7% per cent in the third quarter on a year-on-year unit sales basis and were down 10 per cent in 2022, according to struggling Sweden-based Electrolux, which competes with Arçelik and is struggling to raise the capital to innovate their way out of a slump.
Despite the struggles that Arcelik is facing in Europe, the business is still keen to acquire Whirlpool’s European home appliance business which insiders claim could lead to the business picking up the brand in other markets such as Australia.
Currently Whirlpool is distributed locally by Harvey Norman whose sales at their franchised stores was down 13.9% in the last quarter.
The EU has approved the deal; however UK regulators have stepped in calling for an in-depth review of the tie-up on concerns it “could reduce choice in the supply of washing machines, tumble dryers, dishwashers and cooking appliances” in the UK market where Beko is a dominant brand across multiple categories.
Sorcha O’Carroll, senior director of mergers at the UK Competition and Markets Authority claims that the deal could result in “people paying more or receiving lower quality products” which Arcelik claims is not true.
Turkey-based Arçelik is already one of Europe’s biggest home appliance makers and is looking to grow their installed base in Australia with additional retailers taking on their brands and the introduction of new products.
During a recent meeting with ChannelNews John Brown the CEO of Beko in Australia said that he was confident that the acquisition of the Hitachi business and the expansion of the Beko brand will lead to growth for the business.
Earlier this year Arcelik negotiated a deal take control of three-quarters of a joint venture combining Arçelik’s European business with that of US-based Whirlpool, whose brands include Indesit and Hotpoint.
The deal if successful will result in Arçelik taking control of 14 Whirlpool-owned production facilities.
The CMA warned that if the deal went ahead, the merged company would be the UK’s largest individual supplier of washing machines, tumble dryers, dishwashers, and cooking appliances — a market worth more than A$6.28 billion.
“Arçelik and Whirlpool’s position is particularly strong in the low to mid-range price categories of these domestic appliances, where they would face competition from only a small number of competitors,” it said.
Arçelik said it “remains in close and constructive collaboration with the CMA in the context of the proposed transaction with Whirlpool Europe,” adding that it “will work with the CMA to address the concerns that they have raised.”
To date no decision has been made on the proposed Whirlpool deal.