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issue: January 2005 APPLIANCE Magazine

53rd Annual Appliance Industry Forecasts
Latin America: Movements in Mexico


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by BJ Spanos, Contributing Editor

2004 was a challenge, but major new appliance industry investments will help spur the appliance industry in Mexico.

Pablo Moreno Cadena, general manager of Asociación Nacional de Fabricantes de Aparátos Domesticos, A.C. (ANFAD), admits that 2004 certainly challenged Mexican appliance industry. “It was a very difficult year,” he told APPLIANCE. “The industry was affected by the increment of prices of the industry’s main commodities—steel 75 percent, plastic 55 percent, copper 60 percent, aluminum 40 percent, plus an internal inflation of 10 percent (prices of fuel, electricity, etc.). The industry raised their prices in March around 5 to 10 percent in some categories and in November in all categories around 5 to 8 percent.”

Mr. Moreno does not expect the price of commodities to go down, “so product prices may continue to grow an additional 10 percent in the first half of 2005.” He did add that the weakness of the dollar “represents a good opportunity for our exports to USA and Europe.”

According to the World Bank’s Global and Economic Prospects: Overview and Global Outlook 2005, new investments from large U.S. and European firms, such as Motorola, General Electric, and The Electrolux Group, plus strong export growth, have helped allay fears that Mexico is losing market share to Chinese competition.

Electrolux is building a new factory in Juarez, Mexico and will employ 3,000 workers to build large refrigerators. Electrolux expects to save

$60 million to $70 million a year by moving production to Juarez. While Greenville, MI, U.S. is mourning the loss of the plant, Juarez and the Mexican state of Chihuahua are jubilant, as that area of Mexico has been hit hard by companies leaving for less expensive Asian labor markets.

Whirlpool Corporation also has announced plans to spend about $320 million over 4 years to produce more refrigerators, washing machines, and stoves in Mexico. The company expects to double current production of about 2.5 million appliances a year by the time that expansion is completed. According to the company, appliance sales in Mexico have grown between 5 and 8 percent per year during the past 10 years. Whirlpool also exports about 35 percent of the units produced in Mexico.

Brazilian-based Embraco S.A., a maker of compressors, has even opened a commercial office and warehouse in Monterrey, Mexico to be nearer to its largest market—the U.S. The company’s Mexican operation markets units, produced in its plants in Brazil and Slovakia, for both household and commercial cooling customers.

53rd Annual Appliance Industry Forecast
 
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Latin America
 
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