By Anhar Khanbhai
The Household Appliance Manufacturing industry in Australia is challenged by high costs, particularly compared with manufacturers located in countries where labour costs are low.
The total Australian market for household appliances will be worth an estimated $5.53 billion in 2011-12, of which $3.57 billion, or 64.6%, will be satisfied by imports.
“Australian manufacturers of household appliances are expected to generate revenue of $2.14 billion in 2011-12, down 4.6% compared with revenue in 2010-11,” IBISWorld industry analyst Nigel Fitzpatrick said.
Industry revenue is expected to fall 7.5% per annum in the five years through 2011-12. Revenue will be hurt by a decline in domestic demand; competition from imports, which will also put downward pressure on the prices that local manufacturers can obtain for their products; and a decline in export sales.
Home building activity in Australia will be soft in the five years through 2011-12, which will hinder sales of major appliances to the local building market.
“Growth in economy-wide consumer spending will also be slow,” Fitzpatrick added, ‘with retail sales particularly soft.’
Closures of manufacturing capacity in Australia will contribute to the decline in revenue and exports. Industry revenue is forecast to increase marginally over the next five years to 2016-17.
This growth will be due to an increase in domestic demand, partially offset by a rise in import penetration.
IBISWorld forecasts that growth in consumer spending in Australia will be faster on average over the next five years than it was over the past five, and that there will be modest growth in home building activity.
The four largest companies in the Household appliance manufacturing industry in Australia are Electrolux Home Products, Rheem Australia, Hastie Group, and GWA Group.
Market share concentration in the industry is moderate overall, but high in some segments. Imports hold a significant share in most household product segments. Import penetration is relatively low in some commercial product segments.
There is only one whitegoods manufacturer in Australia: Electrolux. Fisher & Paykel closed its Australian plant in March 2009.
A significant proportion of the manufacturing capacity of small appliances has moved offshore. Household air conditioners and small household appliances are largely supplied by imports, mainly sourced from Asia.
The Paloma Industries Group, Rheem and GWA hold dominant shares of Australia-produced water heaters.
The entry of Frigrite Refrigeration into administration in early 2011 further consolidated the commercial refrigeration market.
