For years, the home appliance industry has been in dire straits and hit with various blows rendering it unable to live up to its potential.
The high inflation rate that brought about a considerable hike in production costs, along with significant currency devaluation, caused foreign products with lower prices to be favored over their domestic counterparts.
Coupled with rampant smuggling and the drastic reduction in people’s purchasing power, the industry has simply been unable to stand on its feet.
Following Iran’s landmark nuclear deal with six major world powers and the promise of sanctions imposed on Iran over its nuclear program being lifted, the industry is seeking to make a comeback. However, before that can happen, it must first overcome its ailing condition to be able to enter the post-sanctions era and not throw in the towel come competition time.
CEO of Pars Home Appliances Company Mohammad Reza Mohseni believes that the monetary and fiscal policies of the government and the Central Bank of Iran are of utmost importance in improving the industry’s condition.
“The government should implement certain supportive policies such as increasing import tariffs and providing manufacturers with low-interest loans to help bring the industry back on track,” Donyay-e-Eqtesad quoted Mohseni as saying.
“The government must accept that it has had a central role in the industry’s current crippling condition, and now it must do all it can to fix it,” said the chairman of the Association of Small Home Appliance Manufacturers, Mohammad Reza Dorafshar.
He noted that the main expectation from the government is to not hand the country’s market and potential customers to foreign firms “on a silver platter” following the lifting of sanctions.
“Foreign firms should be encouraged to invest in the industry and attempt joint venture production with domestic manufacturers so that we can gain access to modern technologies and improve the quality of our products and eventually start exporting,” he said.
Furthermore, according to Himalia Company board member, Ebrahim Lotfi, the main issue holding back the industry is illegal imports.
“The low prices of contraband home appliances tempt the customers to purchase them even without any after-sales service,” he said, adding that the smuggling of foreign appliances effectively puts domestic production units out of work.
Domestic brands currently have only a 35% share of the domestic appliance market and consumer tastes have already shifted toward foreign brands.
Nevertheless, the way forward, according to head of Iran’s Home Appliances Industry Association, Habibollah Ansari, is to focus on advertising to promote domestic brands while trying to obtain modern technologies in order to improve product quality.
“Iranian home appliance manufacturers have the potential of meeting the domestic demand by basing their production on consumers’ newly acquired tastes,” he said, adding that access to cheap energy resources, educated workforce and favorable geographical conditions are advantages the industry can use to enter international markets in the post-sanctions era.
