HOME APPLIANCE 2025: CALL TO ACTION

HOME APPLIANCE 2025:

A VISION FOR THE HOME APPLIANCE
INDUSTRY IN EUROPE

Promoting jobs, growth, skills,

innovation and sustainability

CECED European Committee of Domestic Equipment Manufacturers 1

 HOME APPLIANCE 2025: CALL TO ACTION

Index

A message from the President ............................................................................................................................................................................................................................ 4

Context | Home appliances: working for Europe ...............................................................................................................................................5

Underpinning the European way of life with innovation ......................................................................................................................................................................... 5
A European manufacturing success story ...................................................................................................................................................................................................................... 5
High wage, highly skilled jobs ................................................................................................................................................................................................................................................................. 5
On the frontline of ecodesign, recycling and customer value ...................................................................................................................................................... 5

Context | But can Europe still work for home appliances? ...................................................................................................6
Global competitiveness at risk .............................................................................................................................................................................................................................................................. 6
Regulation disrupting innovation ....................................................................................................................................................................................................................................................... 6
Energy savings and revenues could be lost due to limited product choice ........................................................................................................ 6
Shortfall in future European engineering skills ...................................................................................................................................................................................................... 6

Home appliance industry | Vision 2025 .................................................................................................................................................................................... 7

Pillar 1 | Achieve smarter and better regulation ..................................................................................................................................................8

Pillar 2 | Advance sustainable lifestyles.......................................................................................................................................................................................9

Pillar 3 | Make the connected home a reality............................................................................................................................................................10

Pillar 4 | Accelerate Europe’s economic growth.................................................................................................................................................. 11

CECED European Committee of Domestic Equipment Manufacturers 3

 A message from the President
Welcome to Home Appliance 2025.

This document sets out a vision for the future of home appliance industry in
Europe, supported by a ‘call to action’ for policymakers and new statistics on the
socio economic benefits of the sector to the European Union.

We want to secure the competitiveness of the home appliance industry in Europe

and advance home solutions and sustainable lifestyles for our consumers by the
year 2025.

We hope this document can be a platform for a European Commission sponsored

vision exercise that addresses the drivers and barriers of the industry’s
future performance, in partnership with all stakeholders. Additionally we call
for a structured, coordinated and ongoing dialogue between home appliance
manufacturers in Europe and the European Commission.

The home appliance sector is a major manufacturing actor, offering highly skilled,
highly paid employment directly to almost a quarter of a million people in Europe;
and indirectly to a further three-quarters of a million1. Our appliances also improve
daily domestic life in all of the 211 million households in the European Union,
providing time, energy and health saving solutions to all its citizens.

Despite this, our industry sits at a crossroads. Beyond the general macro-
economic environment, manufacturing in the European Union creates challenges,
particularly when set in the context of a highly dynamic global marketplace.

At the same time, the pace of innovation and change in home appliance
manufacturing is expected to undergo a step-change in the coming decade, as the
introduction of the Internet of Things impacts our marketplace.

We have therefore come together as an industry, under the umbrella of CECED2 to

propose a vision 2025 and ‘call to action’, as the starting point in what we hope can
be a more substantive and collaborative exercise.

We thank you for your interest and your consideration.

Reinhard Zinkann, President, CECED

1 The Economic Impact of the Domestic Appliances Industry in Europe, Europe Economics, March 2015
2 The home appliance manufacturing industry in Europe is represented by CECED. Direct Members are
Arçelik, Ariston Thermo Group, BSH Hausgeräte GmbH, Candy Group, Daikin, De’Longhi, AB Electrolux,
Gorenje, Indesit Company, LG Electronics, Liebherr Hausgeräte, Miele & Cie. GmbH & Co., Panasonic,
Philips, Samsung, Groupe SEB, Vestel, Vorwerk and Whirlpool. CECED’s member Associations cover
the following countries: Austria, Baltics, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, France,
Germany, Greece, Hungary, Italy, Latvia, Lithuania, the Netherlands, Norway, Poland, Portugal, Romania,
Slovakia, Spain, Sweden, Switzerland, Turkey and the United Kingdom.

4
 HOME APPLIANCE 2025: CALL TO ACTION

CONTEXT

Home appliances: working for Europe

Underpinning the European way of life High wage, highly skilled jobs
with innovation The home appliance industry directly employs
Home appliances like refrigerators, washing machines, approximately 211,000 people in Europe at an average
dishwashers, ovens, vacuum cleaners and radiators wage of €29,500 per employee6. For Europe, unit
contribute significantly to domestic life and society. Not labour spending is relatively high,
only do they improve food storage, food preparation reflecting the specialised nature
and household hygiene, but equally as importantly, of many jobs in the sector. The
they liberate the family from laborious chores, helping scale of the industry’s activities
them to dedicate time to other pursuits. As a result, in Europe also provides up and
economist Ha-Joon Chang has claimed that the washing downstream employment to many
machine (taken as a proxy for all household technology), thousands of others. In total, the
has been a more important invention than the internet3. industry’s contribution
to employment in the
The home appliance industry in Europe European Union is
has a proud history of developing estimated to be 963,000
innovative appliances that support jobs.
consumer lifestyles. In 2012, the
industry made a €1.4 billion contribution
to research and development activity On the frontline of ecodesign,
in Europe. In recent months, industry recycling and customer value
leaders have highlighted the prospect Home appliance design, manufacturing and labelling
of providing connected home appliances to enable the has undergone a sustained revolution over the past
‘connected home’, within the next decade: a trend that decades, leading to a highly optimised product offering.
Europe can lead. Currently at least 23 measures set ecodesign and
energy labelling requirements on domestic appliances,
A European manufacturing from refrigerators (1991) to hoods (2015). Enormous
improvements to the design and sustainability of
success story home appliances have been achieved. For example,
Home appliance manufacturing is a sector in which the average energy efficiency index of a refrigerator
Europe has maintained significant strength. In 2012 placed on the market in 2013 was 40% better than in
approximately 3,600 companies were involved in 2003. In parallel, sales prices of home appliances have
manufacturing home appliances within the EU 28, declined on average by approximately 4% since 2005,
including a number of major global brands, many large while broader inflation has increased by 20%7. This is a
firms and around 20% of SMEs4. The most recent great accomplishment for the home appliance industry.
figures available show that the The industry also plays a substantial role in taking care
total turnover of the industry of recycling 3.2 million tonnes of discarded equipment
in Europe was €48 billion each year under the WEEE Directive.
(2013), contributing €53.3
billion to European Union
GDP (2011) and €14 billion in
tax revenues (2011)5.

3 23 Things They Don’t Tell You About Capitalism, Ha-Joon Chang, 2012
4 The Economic Impact of the Domestic Appliances Industry in Europe, Europe Economics, March 2015
5 The Economic Impact of the Domestic Appliances Industry in Europe, Europe Economics, March 2015
6 The Economic Impact of the Domestic Appliances Industry in Europe, Europe Economics, March 2015
7 The Economic Impact of the Domestic Appliances Industry in Europe, Europe Economics, March 2015

CECED European Committee of Domestic Equipment Manufacturers 5

CONTEXT

But can Europe still work for home appliances?

Global competitiveness at risk Energy savings and revenues could be
While currently consumers in the EU enjoy good lost due to limited product choice
product choice and see declining prices due to strong Significant design obligations on newly manufactured
competition amongst a plurality of players, the context is home appliances have increased production costs, but
changing. High EU energy costs, lagging infrastructure, still maintained appropriate levels of consumer choice.
limited access to finance, and red tape create an However, if the European Commission overcooks
unfavourable business environment. The industry is ecodesign by abandoning the least life cycle cost
reacting with dynamism to several recent bankruptcies, principle, consumer choice could be lost. Limited choice
both through product innovation and company re- is likely to reduce sales, and without product sales the
organisation; however unfavourable conditions do not energy efficiency potential of new energy efficient
support long-term growth. As a result, skills, know-how, appliances will not be translated into real energy
assets and businesses that took a century to develop, savings.
are under threat.

Shortfall in future European

Regulation disrupting innovation engineering skills
Major and frequently updated design obligations
Making the shift to digital manufacturing in Europe
stemming from regulation are disrupting the industry’s
and maintaining competitiveness in the region will
ability to fulfil its innovation potential in Europe. Not
require access to an ever more specialised labour pool.
only do changes to the policy framework disrupt
Comparatively however, the EU has now already fallen
the innovation cycle, but the burden of regulatory
critically far behind other regions in its promotion of
compliance is having a significant dampening impact
and investment in developing the next generation of
on the industry’s ability to commit resources where
engineers.
they are needed. For example, research in 2008 for
the European Commission found that administrative
compliance costs related to the RoHS directive
exceeded the costs of the engineering changes that the
regulation required.8

8 Study on RoHS and WEEE Directives. Brussels: DG Enterprise and Industry. Arcadis, 2008

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 HOME APPLIANCE 2025: CALL TO ACTION

HOME APPLIANCE INDUSTRY

Vision 2025
The following vision and call to action were developed through a collaborative process involving CECED member
companies: Arçelik, Ariston Thermo Group, BSH Hausgeräte GmbH, Candy Group, Daikin, De’Longhi, AB Electrolux,
Gorenje, Indesit Company, LG Electronics, Liebherr Hausgeräte, Miele & Cie. GmbH & Co., Panasonic, Philips,
Samsung, Groupe SEB, Vestel, Vorwerk and Whirlpool.

Our vision for 2025

is to be:

“An innovative home

appliance sector in
Europe enabled to
advance sustainable
lifestyles, achieve
global leadership and
provide skills and
growth”

To achieve this vision we call upon European policymakers to work with us to:

◊◊Achieve smarter and better regulation

◊◊Advance sustainable lifestyles
◊◊Make the connected home a reality
◊◊Accelerate Europe’s economic growth

The foundations of this partnership would benefit from the establishment of:

◊◊A European Commission sponsored, multi-stakeholder vision exercise

◊◊A platform for structured, coordinated and ongoing dialogue between the
home appliance industry in Europe and the European Commission

CECED European Committee of Domestic Equipment Manufacturers 7

PILLAR 1

Achieve smarter and better regulation

In order to achieve smarter and better regulation, we call upon the European Commission to:

1. Establish a structured, coordinated and ongoing This lack of coordination between policies also
platform for dialogue between the home appliance requires company product development teams to
manufacturing industry and the European divert efforts from research and development in
Commission. order to meet multiple legal deadlines. The lack
of a streamlined approach to product regulation
As one of Europe’s major manufacturing
affecting home appliances creates significant work
industries operating in an increasingly competitive
and expense for the manufacturers and detracts
marketplace, home appliance manufacturers in
from investment in innovation.
Europe call upon the European Commission to
establish a platform for ongoing dialogue.
3. Apply the New Legislative Framework to carefully
Understanding the differentiated condition and calibrate between the merits of regulation and
needs of the home appliance sector, relative market-based solutions when considering any
to other areas of manufacturing, is of growing future legislation.
importance, particularly if the EU is to establish
itself as a leading manufacturing hub for the The home appliance industry in Europe is a proven
connected home. promoter of energy efficiency and environmental
protection.
We want to work with you to develop a policy
roadmap from now until 2025. An opportunity Legislation, when needed, can be an effective tool
exists today to dedicate resources in support to help ensure these goals; however it is important
of the industry’s desire to play an active role in to carefully judge when other mechanisms may be
supporting President Juncker’s jobs, growth and able to achieve a response that meets consumer
competitiveness agenda. needs, maintains freedom to innovate, and supports
competitiveness.

2. Ensure that when policy is needed it is clear, In order to achieve this, we propose the following
consistent, supports our freedom to innovate and three-step process to support decision making on
creates the conditions for competitiveness. the need for and scope of legislation:
Home appliance manufacturers in Europe believe Step 1: Verify the relevance of an environmental or
that unintended impacts of cumulative layers of energy-related demand
regulation are currently stifling important and
expected innovations. Also, that they increase costs Step 2: If found to be relevant, choose the optimal
and reduce design flexibility, resulting in a loss of vehicle (regulation or market approach) and
competitiveness globally.
Step 3: In case of regulation, adhere as much as
One example is the duplication of energy efficiency possible to the New Legislative Framework
regulation that imposes energy efficiency standards by establishing the essential requirements
on components within a product (e.g. a motor) as in regulation, and elaborating the details in
well as on the whole appliance (e.g. a washing harmonised standards.
machine). This duplication introduces rigidity and
limitations into the design process, and is unlikely to
optimise the energy efficiency performance of the
appliance, or the best lifecycle cost.

8
 HOME APPLIANCE 2025: CALL TO ACTION

PILLAR 2

Advance sustainable lifestyles

In order to advance sustainable lifestyles, we call upon the European Commission to:

1. Safeguard our freedom to commercialise new time 2. Work with us to ensure increased consumer choice
and resource saving functions for the consumer. to make all lifestyles sustainable.
The growth of our industry is directly linked to Becoming an industry that sells millions of
our freedom to innovate for our consumers. We appliances to European consumers each year has
improve lifestyles with new time and resource required us to pay close attention to understanding
saving functions; unlock new possibilities addressing the diversity of consumer wants and needs.
unexpressed and changing consumer needs; and
enhance consumer experience through constant European energy efficiency regulation focuses on
innovation in ergonomics and design. average use patterns of home appliances. This has
already led in recent years to reducing consumer
choice, potentially denying the most cost and energy
efficient solutions for consumers with outlying
use patterns. For example a consumer who is
purchasing white goods for a holiday home that is
rarely used, may no longer be able to find the most
appropriate solution in Europe.

As an industry that has a proven track record of

voluntary eco-efficiency innovations (e.g. CFC phase
out), we are confident that with the right conditions
in place, that protect our freedom to innovate,
market competition will enable us to re-introduce
Today’s challenge: the prospect for smart and greater choice for all consumer lifestyles.
connected home appliances that offer a range of
One essential precondition for this is to maintain the
new functions to consumers (including efficient
least life cycle cost principle in European regulation.
energy management and even active participation
in the energy market) is tantalising. However, our
ability to commercialise these functions could be 3. Turn energy efficiency potential into real energy
lost if constrained by national energy regimes. A savings.
single market approach to the energy union would
Continuous improvements to the design of home
better support the innovation of smart appliances
appliances has led to greatly enhanced energy
for European consumers.
efficiency and performance, but also higher
The benefits accrued by supporting our freedom to production costs and reduced consumer choice.
innovate extend far beyond the industry. Nordhaus These factors, in combination with the economic
(2004)9 found that “only a minuscule fraction of the uncertainty of the past few years have contributed
social returns from technological advances over to falling sales figures for new highly optimised,
the 1948-2001 period were captured by producers, energy efficient products. As such, the potential
indicating that most of the benefits of technological energy savings that could be achieved as a result
change are passed on to consumers rather than of currently available product ranges are not being
captured by producers.” fully realised. We would like to work with you to
seek solutions that will enhance highly efficient
product uptake and thereby reduce household
energy consumption.

9 http://www.nber.org/papers/w10433.pdf

CECED European Committee of Domestic Equipment Manufacturers 9

PILLAR 3

Make the connected home a reality

In order to make the connected home a reality, we call upon the European Commission to:

1. Establish a ‘Connected Appliances’ platform with 3. Coordinate with industry to align investments
policymakers, consumers and industry to discuss in technology innovation with supporting
trends and market uptake as part of the EU Digital infrastructure.
Single Market. Realising the full potential of the connected home in
We need an agenda to establish and capitalise Europe cannot be achieved by the home appliance
on the conditions in which Europe can play a industry alone. For innovative, connected appliances
leading role in manufacturing the connected home to work effectively and deliver their full benefits to
appliances of the future. We call upon the European the European consumers and society, appropriate
Commission to establish a platform in which national and domestic infrastructure will also be
policymakers, industry and other stakeholders can required.
together assess the scale of the opportunity for the
European Union and the structures necessary to For example, the greater penetration of high-speed
ensure its fulfilment. internet connections throughout the European
Union, and ultimately the wide availability of gigabit
internet speeds will greatly facilitate the proper
2. Establish the pre-conditions for further industry functioning of the Internet of Things.
investment in appliances for the connected home by
establishing clear and consistent policy.
Innovative businesses require legal certainty to
have the confidence to invest in new technologies.
In order to create the pre-conditions for further
industry investment in appliances for the connected
home, the European Union must first set clear and
consistent market guidelines that provide the legal
clarity on issues including data privacy and data
security.

Furthermore, setting clear standards on the

interoperability of appliances in the connected
home will benefit consumers and help establish
such products that have been designed and
manufactured in Europe as a global reference.

With this framework in place, the home appliance

industry can invest further in a free, functioning and
competitive European marketplace.

10
 HOME APPLIANCE 2025: CALL TO ACTION

PILLAR 4

Accelerate Europe’s economic growth

In order to accelerate Europe’s economic growth, we call upon the European Commission to:

1. Promote EU engineering skills by partnering, 2. Enhance market surveillance by working with

alongside key industry associations, in a high- national governments to improve best practice
level skills council to define future skills needs, sharing and cooperation; thereby unlocking the
education and training programmes, and life-long potential of existing EU regulation.
learning initiatives. Strengthening pan-EU market surveillance can help
The role of engineers in European manufacturing ensure protection from non-compliant products
operations is increasingly trending towards higher for consumers and the environment, as well as
skilled, more competitive positions. The conversion ensure equal competition amongst economic
to digital manufacturing processes will also create actors. As such it is vitally important to the ongoing
ever greater competition for jobs within the home competitiveness of home appliance manufacturing
appliance manufacturing sector. in Europe.

We therefore call upon the European institutions Currently, home appliance manufacturers in Europe
to work with us to establish a high-level council are penalised due to products that are non-
drawing together key representatives of those compliant with EU standards gaining access to the
industries for which engineering remains a core market place.
operational need to establish a flexible future
strategy for Europe; including specific provision to Additionally, divergent interpretation and application
be made for home appliance manufacturing in the of EU legislation by national market surveillance
Erasmus+ sector skills alliance programme. authorities in Europe disrupt the EU single market
for home appliance manufacturers.
In this context it is important to remember that
for each job that can be maintained within home To address these concerns in the short and medium
appliances manufacturing in Europe, between three term, we encourage the European Commission to
and four additional jobs are created by indirect and build on already existing, or envisaged structures
induced employment.10 such as the ADCO groups or a European Market
Surveillance Forum.

By creating dedicated, product related focus

groups consisting of experts from the European
Commission, Member State authorities and relevant
stakeholders (industry, consumer groups, NGOs, test
labs) it would be possible to act proactively, rather
than only reacting to already existing problems.
These groups could identify potential problems,
agree on solutions, and develop coordinated action.

In the long term, we call upon the European

Commission to set up a dedicated EU agency
supporting national market surveillance authorities.

We believe these steps would help unlock the full

potential of existing regulation.

10 The Economic Impact of the Domestic Appliances Industry in Europe, Europe Economics, March 2015

CECED European Committee of Domestic Equipment Manufacturers 11

For more information, please contact

CECED AISBL
European Committee of Domestic Equipment Manufacturers
Bld Brand Whitlock 114
1200 Brussels
Belgium

T. +32 2 738 78 10
F. +32 2 403 08 41

www.ceced.eu
www.twitter.com/CECED_Europe

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