How much does the consumer really benefit from the device subsidy

By George Lampiris

To subsidize and with the above any increases that have passed in the market in the last period of time comes the subsidy through the program “Recycle-Change Device”, according to sources in the market of electrical appliances, who maintain knowledge of the subject. According to the same sources, at present the increases that have been implemented in all three product categories – air conditioners, refrigerators, freezers – are at the level of 7% -10%. The reason why the increases are kept at these levels until now, is because, for example, in the air conditioning sector, traders have squeezed the profit margins in these products. It is noted that the increases in air conditioners are at the aforementioned levels, however this is a category that maintains a high double-digit profitability over time.

Bigger increases are passed on to air conditioners by well-known and well-established brands, which are more widely accepted by the consumer public. The revaluation rate in these cases is 2% higher than the average revaluation in most brands on the market.

At the same time, the subsidy offered by the Ministry of Environment within the NSRF for the replacement of devices, starts from 30% up to 50% per device, depending on the income category to which the respective consumer belongs. However, as market executives report to Capital.gr, the first signs of the start of the ongoing filing process are particularly encouraging. We remind you that the total budget of the program amounts to 150 million euros, with the subsidy per device ranging from 135 to 710 euros.

How limited are the profit margins in air conditioners

According to the same information, the gross profitability of air conditioners is said to have been reduced by about 8% to 10% compared to last year, with the profit margin of these devices currently amounting to 25%. The previous increases in air conditioners were due to rising production costs in factories abroad, in countries such as China, Thailand or elsewhere. At the same time, however, freight rates have risen, which has also affected air conditioning market prices, encouraging price increases. In addition, when the new price lists in the air conditioner market were announced in February and March 2022, the price of the dollar was at the level of 1.13. However, today, when the price of the dollar is at the level of 1.05, most companies do not intend, according to the same sources, to make increases, pointing out that the representatives in the market of air conditioners and wider electrical appliances do not increase prices, given the already limited financial possibilities of the consumer public.

The process of granting the aid for the replacement of electrical appliances is ensured by the publication of the indicative price list prices set by the production companies and not by the respective traders. This will allow consumers to fully control the process and have a price comparison in the market, in order to avoid possible price increases by some commercial companies. Practically, the price of the suggested suggested retail prices on the relevant platform, as reported by the same sources, corresponds to the price levels that were valid for the subsidized devices during the months of February and March of 2022.

The path for the sales of air conditioners throughout the year 2022 is steadily upward

It should be noted, however, that based on the latest market data, air conditioning products are the only category of appliances, which records an increase in sales in five months, with a percentage of about 25% in terms of sales in units. On the contrary, all other categories, such as refrigerators or freezers, are declining in unit sales over the same period, recording a high double-digit negative rate of change.