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Established
since 1989, AMA have researched and published a wide range of reports on
building products and consumer durables in the UK, with a particular
emphasis on electrical products and components markets. Report areas
include Heating, Ventilation and Air Conditioning, Domestic Heating,
Electrical Accessories, Kitchen Appliances, Generating Sets, Lighting,
Security, Panel Builders, Bathrooms and Showers. Also published are a
wide range of distribution reviews including Builders Merchants,
Electrical Wholesalers and DIY Multiples.
This new report reviews the electrical wholesale markets in the following EU
countries:
France
Germany
Belgium
Netherlands.
It provides a
brief overview of the economic conditions in these countries, with
particular reference to the construction market. The report presents an
overview of the current structure of the electrical wholesale market in
each country and describes the key players in the market. In addition,
the report represents a companion to AMA Research’s report on the ‘UK
Electrical Wholesale Market’, the 8th
edition of which was published in November 2004.
Information
was gathered from a number of sources, including published information,
government statistics, trade interviews and company literature. The aim
of the report is to provide a broad review of the markets in France,
Germany, Belgium and the Netherlands, analysing market structures,
product mix, supply and distribution trends. Sources of further
information are also included for reference purposes.
Following the
introduction of the EURO and abolition of national currencies, there are
already early signs of restructuring in the electrical products sector
– both in terms of product supply and distribution. This report
assesses current trends in both supply and distribution, reviewing recent
trends and potential areas of change in the future, particularly in
relation to supply structure.
Throughout
the report, figures are given for market size,
recent trends/forecasts, product mix and market
shares for leading suppliers. It is emphasised that these
figures are estimates only and should
be used as guidelines only. While there are a range of figures available
on market sizes and product sales, there are no common methods of
analysis or definition, which varies significantly between companies and
countries. For example, product definitions will always vary, while some
companies will include non-wholesaling activities within their sector
figures, which can affect market data. Equally, currency conversion rates
have also presented a problem, particularly with the switch to the Euro
and the relative value of Sterling, which can affect comparisons between
countries.
However,
the objective of the report is to provide an overview
of the electrical wholesale market in these countries as a basis for
general assessment of market trends within the major markets.
This section
provides a brief overview of the total
electrical wholesale market within the European Union,
identifying the relative shares of the major countries, together with
broad comparisons of economies.
When measured
in Euro terms, the UK economy has now become the 2nd largest
in the EU, and the 4th largest in the world. The table
illustrates the relative decline of Germany in recent years, though it
should be emphasised the figures cover a re-unified Germany with lower
per-capita incomes in the former Eastern states. Per capita incomes at
PPS (Purchasing Performance Standards) are relatively even across the 3
countries, though unemployment and inflation levels are much lower in the
UK. Unemployment and inflation levels remain low in the UK compared to
both France and Germany, with levels relatively static in 2004/05 in
France and Germany, though rising slightly in 2005 in the UK.
Each country
report includes a brief review of recent key economic and construction
data, highlighting the impact on the electrical products sector.
Performances between countries have varied significantly in the 2003-05
period, with relatively strong growth in France, though Germany and the
Netherlands have experienced a much tougher trading environment.
In terms of
the overall electrical wholesalers
market within the European Union countries (excluding
recent estimates), there are various estimates of market size. Typical
estimates are around €28-30 billion
(Euros), equivalent to around £18-20 billion
(Sterling).
The figures should be regarded as approximate guidelines
and there can be substantial variations in estimates of market size/mix
by country for several key reasons:-
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Variation in definitions of ‘electrical
wholesalers’ – some countries include TV/electrical appliance
distributors, electronic components distributors etc.
-
Range of products sold by ‘electrical
wholesalers’ – electrical appliances is a key sector of
difference between countries within the overall distribution of
electrical products.
-
Variations in the relative
significance of electrical wholesalers within the overall
distribution of electrical products and role of competing channels.
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Some wholesaling companies include
non-wholesaling activities within their operations.
Many
observers would regard the above figures as high due to the inclusion of
domestic appliances in many countries, with a more relevant estimate of
around €25 billion for electrical accessories. The share for
France, for example, appears very high in relation to the relative size
of the construction market and includes a wide range of ‘non-core’
merchanting activities.
The EU electrical wholesaling market has
been relatively flat in the 2002-05 period, reflecting contrasting
performances in key markets. While there has been some growth in France,
Spain, Ireland, UK and some Scandinavian markets, this has been offset
by flat or declining sales in Germany, Italy, Netherlands etc.
Conditions in Germany, in particular, have been very difficult due to
slow economic growth and a continuing decline in construction activity,
which has had a negative impact on the overall EU market in general. We
estimate Germany’s share of the market has declined over the last 3
years to a current estimated level of around 29%
Economic growth in 2001-03 in the
Eurozone has been relatively low by international standards, though 2004
saw some improvement with GDP growth of 2.1%. This was primarily driven
by Spain and France, with Germany, Netherlands and Italy below the
average for the region.
Performance to date in 2005 indicates a
slowdown, with current forecasts of GDP growth at around 1.3%. Again,
Italy and Germany are expected to be below the Eurozone average, though
growth in Germany is primarily export driven and, as a consequence,
there is no anticipated improvement in the construction and electrical
wholesaling sectors, in particular, at least in the short-medium term.As
with most EU forecasts, the prospects for 2006 are’ better’, with
current forecasts for GDP growth of around 2.0%, reflecting stronger
performance in most key markets. However, rising oil prices have
impacted on all countries in 2005 and it is difficult to forecast their
impact on economies in 2006.
As with most EU forecasts, the prospects for 2006 are’
better’, with current forecasts for GDP growth of around 2.0%,
reflecting stronger performance in most key markets. However, rising oil
prices have impacted on all countries in 2005 and it is difficult to
forecast their impact on economies in 2006.
The key issue is whether economic recovery in key
European markets will feed through into a buoyant construction sector
and a general recovery in the electrical wholesaling market in most EU
markets. France, UK, Netherlands and Belgium are all expected to
experience some growth, but prospects in Germany remain more uncertain,
particularly in view of the recent outcome of the 2005 Election which
has resulted in a coalition government with less commitment to reform
than anticipated.
Analysis of the electrical wholesale markets in Germany,
France, Belgium/Netherlands includes a review of the differences in
structure of the respective countries, highlighting key market trends,
major suppliers and distribution issues.
A key issue to emerge from the analysis is that there
are 3 leading multi-national wholesale groups with a reasonably strong
presence in several markets:
Sonepar
Rexel
Hagemeyer
Sonepar and Rexel are both based in
France with high market shares in their home market and a leading
presence in other EU and international markets. Hagemeyer are based in
the Netherlands, but have a strong presence in Germany and the UK. Other
groups with wholesaling operations beyond their national base are Solar
and CEF, but neither group have the
international scale of operations of the leading 3 suppliers.
In most markets, buying groups are
relatively strong and operate to protect and co-ordinate the interests
of independents, but in general there is a trends towards further
concentration of supply. The introduction of the Euro and emergence of
large customer groups with Pan-European operations are just two factors
encouraging the formation of international wholesalers capable of
providing the level of pricing, service and support required.
Over the 2002-05 period, the supply of
electrical accessories, components and appliances in Europe is becoming
increasingly concentrated, with the development of pan-European
suppliers in many sectors of the market.
Electrical accessories have traditionally
been a fragmented market, but major groups have emerged as product
specifications, standards and applications have become more harmonised
over the last decade. This is also partly driven by the emerging threat
of low-cost imports from China, which is driving down average prices in
some sectors and markets, and consequently undermining growth prospects
in value terms.
This report reviews the supply trends in
each of the markets, illustrating the current position of the leading
wholesalers and identifying areas of potential change in the future,
while also reviewing key factors influencing product trends.
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