“We are unable to cover the exchange rate differences from our profit margins, which are already nearing zero. Consequently, we are forced to raise the price of our products merely to cover the depreciation of the leu,” Eugen Paturan, Country Manager of Indesit Company, told Business Standard.
However, this decision does not necessarily mean that shelf prices will increase, as retailers have sufficiently high margins to cover the difference.
The leu depreciated close to its all-time low against the euro, reaching RON 4.2127/€1 on Friday, 9 January, when the national currency registered its fifth consecutive session of significant depreciation since the beginning of the year, due to the negative feeling of investors regarding the region.
The Romanian white goods market (refrigerators, cookers, and washing machines) amounted to 1.3 million units in 2007, registering a total value of over €350 mln. The Arctic company is market leader, with a 30 percent general market share. Other major players include Electrolux, Whirlpool, Gorenje, Zanussi, Siemens, and Bosch.
