When we look at the growth details, we see that some sectors grew above the average while others were below average. As you can remember, the automotive sector, durable consumption goods, white and wooden goods and office machines were the leading sectors where dynamism was felt last year. These sectors were among the most effective areas growth-wise. The slowest-growing sectors were labor, labor-dense agriculture, construction, food and textile.
One of the sectors that grew above the 9.9 percent average was the durable/white goods sector. When we talk about white goods, refrigerators, washing machines, ovens and dishwashers come to mind. These machines, with a 38-percent production increase, had set a new record in 2002. Realizing a 13-percent increase in 2003, the sector again made a leap last year with a 33.5-percent production increase. A surprising development was the 64-percent increase in domestic sales during the same period. Exports that grew an average of 44 percent between 2001 and 2003, increased 20 percent last year. Imports grew 22 percent in the corresponding period. In spite of all these, when we look at the figures, we see that a total of 11,643,000 white goods were produced last year and 7,211,000 were exported (that is 62 percent). The number of white goods imported was 440,000. In other words, six imports for every 100 exports.
It is a reality that for demand postponed due to the 2001 crisis, in order to be back at full speed, campaigns and installment sales have been the major elements boosting growth and development in this sector. However, a 64-percent increase last year was unique. The sector has made great strides since 2002, and this development manifested itself in exports, as we have mentioned above.
The white goods sector, different from the automotive sector, is a more locally and technologically-based sector, that began to show off in the world market with its own brands. Today, 30 percent of the white goods sold in Europe are exported from Turkey.
The luck factor in this sector is that there is no major difference between the logistic and production costs in China, which has become the world's nightmare in this sector, and the costs in Turkey. This situation provides a significant advantage for Turkey, particularly in the European market.
Furthermore, the pace of white goods, as one of the sectors that makes the biggest investments in research and development in Turkey, is a very significant success. Hence, the sector is able to adopt technological developments immediately and even overtakes its rivals. The big local actors in this sector, put pressure on their foreign rivals both in the international and domestic markets, in terms of production, are marketing and service networks.
After its manufacturing operations in Romania, Arcelik, controlling half of the market, is preparing to open a plant in Russia, besides the additional domestic investments. Furthermore, the other prominent actor in the sector, Vestel, has reached the final stage regarding investments in Russia, and will join the bandwagon by producing one million refrigerators and washing machines in the second half of this year.
Showing a good performance in recent years and breaking sales records last year, the white goods sector is expected to record a modest increase this year and the next. According to estimates, the sector, on the average, will grow around 14 percent between 2005 and 2006. Sales in 2005 will also increase 17 percent.
The data in the first two months show that there has been a slowdown in production and exports, as was anticipated; nonetheless, this is a promising sector, and without the slightest doubt, will continue to grow.
April 5, 2005
