Mabe and Whirlpool to increase prices in Mexico

Several domestic appliance companies in Mexico have announced price increases of up to 10% due to exchange rate volatility and uncertainty surrounding the NAFTA renegotiation
Mabe and Whirlpool to increase prices in Mexico
Other firms have also stated their intention to increase prices “in the near future” - Photo: Brian Snyder/REUTERS
12/06/2018
13:35
Ivette Saldaña
Mexico City
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Domestic appliances companies Mabe and Whirpool have announced an increase of up to 10% in their product prices, due to the exchange rate volatility and uncertainty surrounding NAFTA. This will be their second increase of the year.

Stoves, refrigerators, ovens, washing machines, tumble dryers, and blenders, among other domestic appliances from around a dozen brands, will increase prices on July 1, during the election day.

Mabe and its brands IEM, Io Mabe, Easy, IEM, and GE Profile, as well as some of Whirlpool, Maytag, Kitchen Aid, and Acros’ distributors have informed of the price increase, arguing that their production costs have suffered due to the exchange rate volatility and the price increase of steel and energy.

Other firms have also stated their intention to increase prices “in the near future”. Such is the case of Teka, according to sources consulted by EL UNIVERSAL.

Justifications such as higher exchange rates, the renegotiation of the North America Free Trade Agreement (NAFTA), and the possibility of ending said agreement are not a novelty. At the end of 2016, before Donald Trump took office as president of the United States, several brands warned distributors that the economic outlook was unclear, and asked to expect subsequent increases.

On December 2016, Whirlpool announced a 15% increase in overall prices, which came into force starting 2018, as did Mabe, according to several letters addressed to EL UNIVERSAL.

On May 31, 2018, on the day that the United States announced the imposition of steel and aluminum tariffs, Whirlpool, Maytag, Kitchen Aid, and Acros distributers announced an 8% increase in their price list, which was notified to retail chains and department stores.

“Since this information is of public domain, we have seen a significant increase in exchange rates and input prices in the last few months, especially in products that are most important for our business, such as steel, petroleum products, resins, and gasoline,” Whirlpool announced on a letter, adding that they may no longer continue absorbing the full impact of the tariffs, which is why they’ll have to implement an 8% price increase.

On June 3, only two days after the Mexican Government announced its retaliation to the United States’ tariff imposition by implementing equivalent tariffs on steel and food products, Mabe informed of its second price increase of 2018.

On 1 January 2018, Mabe applied an increase of between 5% and 7% which, adding up to the 9.5% to be adjusted on July 1, will mount up to 14.5% and 16.5% on the first half of the year.

Mabe explained that, although they intended to increase productivity and reduce costs, “there is a growing pressure," which is why contributions are to be adjusted “due to a continuous price increase of basic inputs and raw materials on a global scale, adding to the rising exchange rates of our currency.”

On January 2018, Monogram announced a 12% increase, with Teka following on February, with a 5% increase. On the same month, Frigidaire and Electrolux reported an increase in production costs to their customers. In several letters, the brands stated that production costs suffered an increase due to rising prices of raw materials used to elaborate domestic appliances. They made their decision known since the end of May.

There are some premium brands with prices valued at US dollars, whose sales are directly linked to the daily exchange rate, such as Marvel, Subzero, Thermador, Viking, and Wolf, among others.

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