Vestel put retail on pause

Amid strong competition from Chinese and others, Turkish electronics and home appliance manufacturer Vestel has suspended a project to restart production in Russia. The brand plans to develop in the country in the corporate sector: according to Kommersant, the supply of monitors has already begun in Sberbank, Gazprom and Rosatom. Experts acknowledge that there is business demand for professional monitors, but in this segment too, Vestel will face high competition both in terms of price and quality.

The Turkish manufacturer Vestel has suspended a project to restart production in the Russian Federation due to high competition from Chinese and other Turkish vendors that already have capacities in the country, Alexei Pogudalov, commercial director of Holodilnik.ru, told Kommersant. According to him, the company cannot sell even the goods that it brought from Turkey, “parallel imports have now been established, everything that was sold last year against the backdrop of rush demand has now turned out to be in demand in a completely different volume.”

Due to high competition and a decrease in demand for household appliances in the Russian Federation, they began to reduce work and existing factories. So, the capacities of the Italian brand Candy in Kirov suspended production, similar problems arose with the Turkish Arcelik in Lipetsk (they produce refrigerators and washing machines Indesit, Beko, etc.). Market participants noted that financial benefits from the Ministry of Industry and Trade are needed to support manufacturers (see Kommersant of April 19). The Ministry of Industry and Trade and Vestel did not respond to a request.

The fact that Vestel is considering restarting the plant, which was closed in 2016, became known in the fall of 2022 (see Kommersant dated November 3). The production was closed at a time of aggravation of relations between the two countries, after a Turkish F-16 shot down a Russian Su-24 in Syria in November 2015. In the company itself, the shutdown of the project was associated with a crisis. An interlocutor of Kommersant in the household appliances market notes that Vestel had financial difficulties in Russia back in 2014, as assembly costs increased, “the company repeatedly tried to sell its capacities, but did not agree with anyone on the price, and production remained mothballed” .

The main problem with the restart of the Vestel plant in the Russian Federation is most likely that the company cannot recruit management, Anton Guskov, a representative of the association of trading companies and manufacturers of electrical and computer equipment RATEK, believes. “The lines in Alexandrov have market potential and may well be competitive, so if the company manages to find experienced management staff, there is a chance of reopening,” he says.

However, another interlocutor of Kommersant on the market claims that Vestel now plans to focus in Russia on corporate sales of Turkish-assembled TVs and monitors and is already cooperating with IT integrators and distributors that supply its equipment with video conferencing systems to Sberbank, ” Gazprom and Rosatom. According to him, the company is now hiring staff for the Russian representative office, which will work in the B2B segment. Sberbank, Rosatom and Gazprom did not respond to requests from Kommersant.

OCS (the official distributor of Vestel) reported that they only supply equipment (monitors, washing machines, refrigerators) of the Turkish brand for retail chains and marketplaces that sell it in the consumer sector. In F+ tech | Marvel confirm that Vestel offers monitors and interactive panels in the corporate sector. “The company has good experience in the production of televisions, which it assembles in its factories. There is a demand for professional displays now, but it is still difficult to talk about the company’s prospects, since it does not have any unique offer, ”they say.

Timofey Kornev