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Hungary:Pricey local furniture turns Hungarians to cheap imports |
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2005-2-18
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Local furniture industry being in fragments, absence of competition, has all resulted in a massive decline of 40 percent over the high during year 2002.
Since the transition as EU member, customer preferences have moved to low priced imports that once throbbing Hungarian furniture market, in its privatised form was ruling the country''s economy since 1997.
Today, Asian rattanware, including Malaysian wooden products, are making acceptable sales in a downward trend in the Hungarian furniture market, which has collapsed by 40% since its 2002 high.
Catering to inexpensive mass markets along with large-scale mid-market pieces from Poland, Slovakia and Romania, Asian materials are particularly in demand offer tough challenge to Hungary''s former vibrant and upper quality goods, offering lower prices yet attractive deals.
Meanwhile, it is battle for survival for domestic manufacturers have got mixed results after making ambitious plans.
A cost cutting exercise and aggressive marketing has proved beneficial in case of a major local manufacturer of leather-upholstered suites, Kanizsa Trend Kft. It is traditionally the largest producer in value sales and in 2004, increased its local penetration by 5% over the previous year.
Garzon Butor Rt, an office furniture leader fell back on sales during the same period, despite a drastic cost-reduction programme. It plans to put up more dealers, add efficiency programmes for its reduced staff and cost cutting efforts etc, but it still projects further lower sales in the coming months.
Netherlands-based Samas Group saw its Falco Sopron Irodabutor Kft unit drop 20% of sales in 2004 over the previous year following its outstanding 2002 results.
Hungarian furniture manufacturers expect greater flexibility after the relaxation of border controls after the country joins the EU, and also hopes that brand loyalty and better quality service would dominate the market place.
In the final analysis, the country''s furniture manufacturers association expects high transportation costs to render imports costly ultimately to help them survive. |
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