Sales of Electrolux appliances increased across most parts of the Asia/Pacific region and earnings improved. The aim is to continue to invest in product innovations to grow profitable across the region.
Kenneth L. Ng, Head of Major Appliances Asia/Pacific
Major Appliances Asia/Pacific has reached the third step on the path to profitable growth: Targeted Growth. The aim is to continue to grow profitable while making incremental growth investments. Important focus areas are to maintain the strong market position in Australia and New Zealand and to expand the offering under the AEG brand in this region, grow in new channels, accelerate launches of connected products, and expand geographically in the growing Southeast Asian markets.
In 2017 Electrolux signed an agreement to form a joint venture in China with Midea. The purpose is to grow the AEG brand in China by combining its premium products and brand with Midea’s strong sales and distribution network. The aim is to build sustainable positions in China for the AEG and Electrolux brands.
A strong focus during the year to grow the most profitable product categories, star products, has improved the product mix.
A large number of continuous improvement projects have started across the region and have contributed to significant savings for the business area. These initiatives have improved cost efficiency and processes across various functions such as logistics, manufacturing flows and spare parts management.
Electrolux has a significant manufacturing capability in Rayong, Thailand, such as manufacturing of refrigerators and washing machines on global platforms for the Southeast Asian region, Australia, New Zealand and China. The positive trend on conversion costs and factory overhead costs continued during the year.
About half of Electrolux appliance sales in the region are in Australia, where the Group is the market leader. The Group’s Westinghouse brand commands strong positions in several product categories in the mass market segment. The Electrolux brand is positioned in the premium segment. Key competitors comprise Haier, Samsung and LG Electronics.
In Southeast Asia, Electrolux has a strong offering of premium products aimed at the rapidly expanding middle class, for example, energy-efficient front-load washing machines and built-in appliances for the kitchen. Water and energy efficiency are key drivers in the hot climate across the region. The Group’s front-load washing machines are well adapted to these conditions and have significant market shares.
China is the largest market for household appliances. The Electrolux share of the Chinese market is relatively low, but there is considerable long-term potential for increased sales to the expanding middle class.
In 2017, overall market demand for appliances in Australia, China and Southeast Asia is estimated to have increased.
8%
7.5%
Organic sales growth across the region. Sales volumes increased in most product categories.
Operations in Australia and New Zealand continued its solid earnings trend and operating income improved in Southeast Asia and China.
| 13 | 14 | 15 | 16 | 17 | |
| Net sales | 8653 | 8803 | 9229 | 9380 | 10048 |
| Operating margin | 1.3 | 5 | 3.9 | 6.7 | 7.5 |
Channel and geographic expansion in the growing South East Asia market
Accelerate launch of connected products and ecosystem
Build sustainable position in China
Core appliances 31% in Australia
Small but growing market share in Southeast Asia
Electrolux ComfortLift dishwasher.
During the year, several new innovative products were launched such as the Electrolux ComfortLift dishwasher and several new products within Food Preparation in Australia and New Zealand, and the gentle clean at lower temperatures Electrolux UltraMix™ washing machines in Vietnam and China.