September 21, 2012 / 2:22 PM / 8 years ago

Turkish white goods exports benefit from Europe slowdown

ISTANBUL, Sept 21 (Reuters) - Cash-strapped Europeans seeking lower-priced products helped boost Turkish exports of white goods such as fridges and washing machines by 13 percent in the first eight months of this year, an industry body said.

Exports of white goods accounted for just 2.9 percent of Turkey’s total exports last year but they are increasing as lower labour and production costs than in Europe enables Turkey to produce less expensive consumer goods.

“Turkish companies are increasing market share in Europe, where the purchasing power has declined, boosting exports,” Ozcan Aydilek, chairman of the White Goods Manufacturers’ Association of Turkey, or TURKBESD, told Reuters on Friday.

Sales of white goods overseas totalled 10.3 million units in January-August and are expected to increase by 14 or 15 percent for the full year, Aydilek said. That would mark a jump from a 5.2 percent increase last year when overseas sales totalled 14.5 million units.

Exports have helped offset flat sales in Turkey this year. Domestic sales of consumer durables totalled 4.28 million units in the January-August period, a decline of 1 percent from last year, according to TURKBESD figures.

The association forecasts total domestic sales this year of more than 6 million units, Aydilek said.

Arcelik, Europe’s third-biggest white goods manufacturer, BSH’s Turkish unit and Vestel are Turkey’s biggest producers.

Aydilek said the sector expects domestic sales to pick up next year after the central bank reduced interest rates, spurring loan growth and property sales and lifting demand for refrigerators, washing machines and other home appliances.

“Housing sales are important to our sector,” Aydilek said. “With lower interest rates, we expect demand for housing to rise. However, this will have a delayed impact on us ... in 2013.”

Turkey has proved relatively resistant to the slowdown that has blighted much of western Europe, partly because of a move by its firms to refocus on the Middle East and Africa, which has generated double-digit growth in exports.

Economic growth in Turkey however is expected to slow to 3-4 percent, down from 8.5 percent last year and the slowing economy prompted the central bank to cut its overnight lending rate on Tuesday for the first time in seven months and it hinted it could do more to try to cushion the slowdown in economic growth. (Reporting by Ceyda Caglayan; Writing by Ayla Jean Yackley; Editing by Susan Fenton)

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