Iran's home appliance industry is in a critical condition due to a combination of severe recession, rising production costs, and declining purchasing power. Industry players have reported that the prices of some goods have multiplied in recent months, and producers are only operating at half of their capacity.
Reasons for the Crisis in the Home Appliance Market
The rise in home appliance prices, especially in the current market, is not solely related to the increase in exchange rates. Factors such as prolonged market recession, energy imbalance, disruption in the supply of raw materials, transportation costs, and the uncertainty caused by war and regional developments play a significant role in creating this crisis. According to Ehsan Fadaei, an expert in the home appliance industry, this situation began with the outbreak of the coronavirus and the market has never returned to normal.
Increase in Raw Material Prices and Its Impact
Fadaei also pointed to the sharp rise in raw material prices, stating that the price of steel sheets has risen from about 80,000 tomans per kilogram to over 220,000 tomans, and some petrochemical materials have increased in price by up to five times. This price increase has intensified, especially after the onset of war and disruption in the supply of raw materials. He also noted that a significant portion of the raw materials for the home appliance industry is supplied by the steel and petrochemical industries, and damage to these sectors directly impacts the final price.
Nasrin Ojaghi, Secretary General of the Iran Home Appliance Industries Association, also referred to the market conditions and stated that contrary to claims of hoarding, warehouses are full due to a lack of customers. Ojaghi emphasized that producers need to sell goods to maintain employment and ensure working capital, and many production units are currently operating at about 50% capacity.
Price Outlook and Proposed Solutions
Ojaghi also mentioned the rise in production costs and stated that it is not reasonable to expect a decrease in prices under the current conditions. She called for the implementation of "demand stimulation" policies and emphasized that if the government does not help strengthen people's purchasing power, the existing recession could lead to an employment crisis in the home appliance industry. Ultimately, given the current conditions, even in the best-case scenario, prices will remain stable in the future, and the likelihood of price reductions is almost nonexistent.
