Merloni of Italy, Europe’s third-biggest maker of domestic appliances, plans to overtake the market share of its two biggest rivals in the next three years, partly by exploiting its new large development and manufacturing base in the UK.
Andrea Guerra, chief executive of Merloni, said that in an industry that is gradually consolidating due to weaker players losing ground, to move up from a 15 per cent share of the European market for white goods to 18 per cent “was a must” for his company.
If achieved, the Italian company would move ahead of the current market share by volume of the two leaders in the European domestic appliance industry – Electrolux of Sweden and BSH, a German joint venture between Bosch and Siemens. Both now account for about 17 per cent.
Total sales of white goods across Europe are expected to be about €25bn ($28bn) this year, measured in terms of retail prices.
The sector has in recent years expanded sluggishly, owing to weak consumer spending in much of continental Europe and also to extreme price pressure partly caused by imports of low-cost appliances into western Europe from countries such as Turkey.
Even if Merloni attained its goal on market share, the other two companies might have also increased theirs.
“We are not necessarily aiming to be the biggest [in this industry in Europe]; there are other goals worth pursuing, such as relating to consumers in the best possible way, or perhaps being the most profitable company,” Mr Guerra told the Financial Times.
Merloni’s growth strategy is based especially around its enlarged UK operations, following the company’s £309m ($489m) two-stage deal last year to take control of General Domestic Appliances, a UK white goods maker formerly owned by the UK’s Marconi and General Electric of the US.
The acquisition has given Merloni a 30 per cent share of the UK white goods market, mainly through GDA’s best-selling Hotpoint brand, and increased the Italian company’s annual sales by roughly 50 per cent to an expected €3bn this year.
While Mr Guerra does not expect to push up the company’s share of the UK domestic appliance market by very much, he says the UK deal could benefit the rest of the company through making it possible to expand exports from Merloni’s UK plants, and also to start manufacturing some UK-developed products in plants in other parts of Europe.
>From FT.com