Sharp Rise in Home Appliances Market Recession

TEHRAN (Iran News) Ojaghi made these remarks during a press conference held on the eve of the 25th Annual Home Appliances Exhibition, attended by members of the media and newly appointed board member Mehrdad Mohammadi.

Ojaghi stated that Iran’s home appliance production has increased from 6 million units in 2017 to 20 million units in 2024, driven largely by private investment despite limited government support. Domestic manufacturers now meet the nation’s demand without relying on imported final products, although consumer preference for foreign brands still exists.

However, she noted a sharp downturn in 2025, with production dropping 38 percent in some sectors and 12 percent overall, while sales have fallen by 40–60 percent, marking one of the toughest years since the Iran-Iraq War.

Ojaghi expressed hope that this year’s exhibition would help revitalize the sluggish market and showcase domestic capabilities.

The exhibition covers 10 halls across 20,000 square meters of indoor space and 800 square meters of outdoor area, featuring 240 Iranian companies and 12 foreign firms from China, Brazil, Turkey, Japan, and South Korea. In addition, five trade delegations from Russia, Armenia, Pakistan, Iraq, and Afghanistan are expected to attend.

She added that the exhibition coincides with the Glassware and Crystal Fair, designed to present a complete export-oriented product portfolio to both domestic and international buyers.

Ojaghi criticized the recent decision to remove the Association from organizing the event — despite 24 successful previous exhibitions — and said that although the management was handed over via public tender, the Association continues to assist the new organizers to ensure a productive outcome.

When asked why some leading brands were absent from the exhibition, Ojaghi explained that the 12-day war in the region disrupted scheduling, forcing multiple exhibitions to be held simultaneously. Many companies, facing poor sales, have also cut marketing and participation costs to survive.

Ojaghi reported that smuggling now accounts for around 30 percent of the market. The new “border residents” regulation, she warned, effectively allows large-scale imports under the guise of local trade — undermining domestic manufacturing.

She urged authorities to regulate and guarantee imported goods, noting that many smuggled or “te-lenji” products lack warranty coverage.

On the issue of damages from the Shahid Rajaee Port incident, Ojaghi said there are no precise data on total losses and that insurance complexities continue to delay compensation.

She also cited electricity shortages as a major production barrier: “Power cuts halted manufacturing last summer, and although the issue has been partially resolved, imbalance in energy supply remains a key obstacle.”

Ojaghi emphasized that Iranian home appliances are increasingly competitive in quality, with positive consumer ratings across online platforms. However, she acknowledged that limited R&D investment, restricted access to advanced machinery, and import barriers have hampered further improvement.

Sales have particularly declined for refrigerators, washing machines, and dishwashers, as consumers are postponing large purchases or opting for repairs instead.

Board member Mehrdad Mohammadi criticized state-controlled pricing, calling it “completely destructive” to the industry.

He noted that foreign exchange allocation delays — sometimes exceeding 160 days — have forced manufacturers to rely on export or free-market currency, driving up production costs. Continued restrictions, he warned, could trigger another price surge within two to three months.

Mohammadi estimated that sanctions have increased import costs by up to 30 percent, mainly due to non-transparent payment channels and the lack of SWIFT or letters of credit (L/C).

“China remains Iran’s largest trading partner,” he said, “but circumventing sanctions raises overall costs and risks.”

Mohammadi added that due to economic instability, consumers increasingly prefer to invest in gold and foreign currency rather than purchasing durable goods.

He also warned that strict regulations on repatriating export earnings have made exports less profitable, further constraining the industry.

Mohammadi concluded that Iran has the potential to reach Turkey’s industrial scale, given access to markets such as Iraq and Afghanistan.

“If legal and export barriers are removed,” he said, “Iranian manufacturers can easily expand to regional and global levels.”