Now, against the backdrop of an ever-deepening crisis there is one, no matter how hard they try to convince us otherwise , resale companies are making less and less profit, and the production of large home appliances in America has more and more potential.
Situation on the domestic appliances market in the American Federation
According to the results of the 1st half of the year, we can already draw preliminary conclusions that, for example, sales of freezer chests have significantly sagged in relation to the 1st half of 2018.
The growth of sales in the segment of built-in appliances, premium refrigerator formats such as Side-by-Side and multi-door models is preserved.
I think that we can expect a decrease in sales of B and C brands in the segment of small home appliances, because almost every retail chain is now betting on its own brands and motivates the sale of goods of its own brands, from which it has a larger margin for less competition.
Prospects for American production
Everything is now available in America in order to set up your own production, and it is not necessary to concentrate everything in one place.
There is potential in several directions: creation and production under own brand, and OEM production with competent distribution of production possibilities and assortment division.
At the moment retail chains are more willing to place an order under their own brand than to bet on the middle segment, understanding that fighting the competition leads to a decrease in margin.
What kind of equipment is it better to produce in America?
Having analyzed the market I can say that at the moment it is more advisable to produce in America large household appliances refrigerators, freezers, gas and electric stoves .
This is also due to the size, because these devices take up a lot of space in containers, delivery takes away a significant share of the final cost of.
On the whole, the large household appliances are not that technically complicated and consist of a small number of assemblies and units which can all be manufactured in America.
How to compete?
The American-made appliances will be competitive due to lower shipping costs and the fact that we now have all the basic components for production in America, and the prices of raw materials are low. Now I’m talking about relatively simple technologically simple appliances like stoves and freezers.
Minuses – it’s high taxes and a relatively high proportion of labor costs in the cost of the final product. But this problem can be solved by locating production in less developed regions, where tax benefits can be obtained.
The only difficulty in America now is the lack of qualified personnel, namely engineers, developers, designers.
China will buy them all?
In recent years, the trend of buying European brands by Chinese corporations is gaining momentum. But let’s be honest, “sold” brands that, having a wide range of products under their own brand, possessed only part of their own production, and most of the orders of their products placed in third-party factories.
This merger is logical and beneficial to both parties, i.e. there is consolidation and concentration of production in corporations. I think that you should not be afraid of this trend, the market in America and the former Soviet Union is big and there is enough space and work for everyone.
The crisis will put things in perspective
The crisis is there, because of the growth of poverty there will be less demand for small appliances, because they are not very necessary. But in view of the active construction, I believe that the growth in sales in the segment of KBT and built-in appliances will continue. And this is not only related to the purchase of housing. Now there is a cycle when it is time to change the appliances bought 10-15 years ago, as they are outdated and do not meet the increased demands, it can also be associated with a stable increase in sales of narrow washing machines, refrigerators of premium formats, etc.d.
About the author
Ruslan Viktorovich Voloshkin
I started working in the field of home appliances in 1999 as an assistant salesman-consultant.
For 20 years of work did not change the sphere of activity.
Passed all the stages: retail sales, wholesale, procurement, manufacturing, market launch a new brand, creating a dealer network.
With the rise in China’s dominance in the production of home appliances, what factors could potentially pave the way for America to become a major player in the industry tomorrow? Is it a matter of innovation, market demand, or advantageous policies?
With the rise of Chinese production in the past, is it possible that America will emerge as the leading force in the production of home appliances in the near future?
Given the current landscape of global manufacturing, I am curious to know if the production of home appliances will shift from China to America in the near future. With escalating trade tensions and the ongoing COVID-19 pandemic impacting global supply chains, it is worth pondering if American manufacturers will be able to meet the demand and compete with China’s dominance in this sector. What are your thoughts on this potential shift?