The European home appliance market is in crisis, with sales down 16% and factories operating at 30-40% of capacity, what this means for Australia is unclear as Chinese brands move to grow share locally and Korean brands look to take advantage of looming tariff issues.
Locally Haier, TCL and of late Midea are now putting pressure on appliance brands including the likes of Samsung, LG Electronics, as well as Miele and BSR Group brands, Bosch, Smeg, Siemens, Gaggenau, and Neff, also under pressure is Electrolux and Westinghouse along with house brand products from Tempo and Residentia.
While the premium market spanning the likes of Miele, Smeg, Gaggenau and AEG appliances have not been affected as much other brands are now feeling the pressure being applied by Chinese brands who are also buying up premium brands such as Asko and Fisher & Paykel.
The two big manufacturing brands Midea and Haier who also own Fisher & Paykel, are carving out significant market share, in Europe and this is set to impact what happens in Australia according to observers.
Also gaining share in Australia is Hisense who also own the former European brand Asko. 
In Europe the household appliance, market is down 16% and this could not have come at a worse time with major Companies facing US tariffs and that’s after the layoff of thousands of European workers.
A double digit decline in appliance sales is unheard off in Europe and has never happened before.
What the Chinese are doing in Europe has been described as “strategic.”
Analysts claim that what the Chinese brands are doing is snatching, in the free standing sector, quotas and sales from EU competitors.”
They are attacking with aggressive strategies with what the Europeans describe as “inadequate products” compared to European designed and manufactured products.
As a result, the European brands are calling on the EU to protect employment, factories, and supply chains from the Chinese players who they are now accusing of “dumping” appliances into the EU markets.
The onslaught by the Chinese brands is so severe that factories under pressure with 30% to 40% operating below their manufacturing capacity.
Observers claim that European appliance Companies can no longer sustain this level of impact that kicked off three years ago resulting in a heavy loss of competitiveness.
According to Italian publication First Online the three-year collapse of appliance sales is hurting European manufacturers with markets around the world including Australia and New Zealand also impacted by the onslaught of Chinese appliance brands.
FirstOnline is tipping a big reduction in the manufacturing capability of European brands and that a quick list of the layoffs which is said to be in the thousands shows the extent of the problem.
What the Europeans are facing are Chinese appliance giants with enormous liquidity.
When Midea, debuted on the Hong Kong stock Exchange they basically reshaped Hong Kong’s IPO landscape, raising A$7.2 billion in September 2024.
The Company has also opened an Australian office in Melbourne and is now taking on archrival Haier who recently announced a major $3.6 million dollar sponsorship deal with Tennis Australia.
Speculation is that both Haier and Midea are still keen to buy Swedish brand Electrolux with Haier seen as the preferred brand if the Swedish family that controls Electrolux decided to sell.
Brands such as Haier and Midea are able to manufacture appliances significantly cheaper than European brands and by buying up European brands they are also able to get access to European designers, IP and the knowledge embedded in European appliance Companies.
They are also getting massive funding from the Chinese government and autonomous regions in China where factories are located.
In the past 12 months flat steel products, used for household appliances, recorded a declined 12.4% while demand in China grew.
Last year European manufacturers were able to slow the decline to 16%, after a dramatic 20% fall in sales in in 2023.
The hardest hit were Swedish, German, and Italian manufacturers with Beko deciding to close their Polish manufacturing plant.
Now a new problem is emerging for European appliance manufacturers with US President Donald Trump and the US administration set to implement new tariffs on appliance manufacturers who rely on the US market for sales.
Trump promised tariffs on all EU imports from 10 to 20% with a special rate of 60% on all imports from China.
Goods likely to see the largest proportional price increases are those facing currently low applied tariff rates and those that are sourced disproportionately from China.
Analysis of current trade flows and tariff rates indicates that EU consumer electronics and appliances could also have to contend with a new tax burden if the new US administration implements Trump’s promised duty hikes.
Donald Trump’s plan to slap fresh tariffs on the European Union could provoke retaliation in an unexpected way – not by taxing American goods, but by taking aim at the dominance of US tech firms in Europe’s digital economy.
In addition to the layoffs already announced by European appliance manufacturers the sector is facing a series of downsizing by suppliers in the supply chain.
Another issue is that shipping Companies are refusing to move stock unless the containers are full claims FirstOnline, with sales in several markets falling due to the impact of inflation and rising electricity costs.
In the European domestic market Korean appliance also gained ground in 2024.
Last year, LG Electronics’ revenue in Europe hit an all-time high of $13.2 billion. Products like washing machines, refrigerators, and TVs were in high demand.
Particularly noteworthy is that OLED TVs achieved a market share of 52.3% in Europe (based on shipment volume). This means that one out of every two OLED TVs sold in Europe is an LG product.
According to Samsung executives’ sales of its Bespoke AI Dryer in Europe tripled compared to the previous year.
In Italy, a key European market, Samsung claimed the top spot in the overall appliance market (including freestanding and built-in appliances) last year.
The brand also maintained its position as the top-recognized consumer brand in Italy.
Analysts suggest that the success of Korean appliance companies in Europe can be attributed to a targeted strategy that exploited market gaps.
In Europe, where reconstruction is strictly regulated, most homes are old and small, leading to a preference for compact appliances.
A common refrigerator design in Europe has the refrigerator compartment on top and the freezer compartment at the bottom, each with a single door.
The impact of the COVID-19 pandemic changed consumer behaviour, with people looking to store more food at home as a result South Korean brands LG and Samsung were able to launch refrigerators that are 2 meters tall, taking advantage of the fact that ceiling heights in European homes are generally higher.
They also released side-by-side refrigerators with a width increased from 60 cm to 75 cm.
They also zeroed in on energy-efficient appliances with Samsung Electronics introducing energy-efficient products that were 15% more efficient than the highest A-grade of European manufacturers.
Their wide refrigerator launched last year reduced energy consumption by 55.9% compared to previous models.
LG Electronics also released a washing machine that consumes 40% less energy than the A-grade.
As for the Australian market retailers and buying groups are still waiting to see how the USA tariff wars play out and what will be the impact. Some are predicting that European manufacturers will start to rationalise their product ranges as they come under pressure.
“It could also result to new appliances and cutting edge designs from European manufacturers, which reinvigorate the market” said a Harvey Norman franchisee.
