Whirlpool: Raising prices could be the only option to hope for profit

“Now, considering the volume is declining on the household appliance market, the solution is for us, as industry, to be able to raise the price, so as to cross the breakeven point. Practically speaking, raising prices at present would be the only option,” Mioara Bolozan, Marketing Manager of Whirlpool Romania, told Business Standard.

Higher prices may prove necessary to be able to cover the depreciation of the leu. The company official explained that Romania is facing a price abnormality for household appliances, as erosion is high even in conditions of a growing market.

“In a year of rising volumes, such as 2008, the average price fell 10 percent in euro. This means price erosion. In Western countries, erosion is generally 1-2 percent, while it was six percent in the region. Volatility is much higher in Romania,” Bolozan said.

Whirlpool’s business in Romania exceeds €60 million, and the company has a 15 percent share of the household appliance market, according to Business Standard estimates, based on market information.

Regarding the evolution of the market in 2009, the marketing manager estimates a 25 percent drop, which is also forecasted for the company’s sales. The Romanian white goods market (refrigerators, washing machines, stoves), registered a volume of 1.3 million units in 2007, and a total value of over €350 mln, according to estimates by players in the field. Arctic is market leader, with a 31.5 percent general market share, while other players include Electrolux, Indesit, Gorenje, Zanussi, Siemens, and Bosch.