Iran currently produces home appliances mainly for the local market.

Smuggling is undertaking illegal transport, particularly across a border. Goods or humans are transported to a place where they are not allowed to be. Posing the main threat to the development of home appliance industry, smuggling has not been able to deter a few dedicated entrepreneurs who remain active against all odds.
Home appliances are electrical/mechanical appliances which accomplish some household functions, such as cooking or cleaning. Traditionally, home appliances are classified into major and small appliances.
Home appliances are part and parcel of each and every family. However, production methods involved in home appliances, as well as the variety of raw materials and marketing strategies, are totally different from those in other industries.

Market Situation
Iran currently produces home appliances mainly for the local market, Fars News Agency reported.
These include top quality air conditioners, deep freezers, refrigerators, TV, washing machines, electric iron, vacuum cleaners, microwave ovens, air-conditioners, water coolers, hair dryers and many other items. Some of these are made under the license of world-renowned manufacturers while others are produced by the unorganized sector.
According to Habibollah Ansari, secretary-general of Home Appliance Council, smuggling of foreign-made home appliances into the country is widespread, and despite huge investments, manufacturers are unable to supply goods to the entire domestic markets or maintain a market edge.
At present, there are 500 home appliance production units in Iran, each employing between 50 to 2,000 people.
Ansari declared that the home appliance industry is in a state of crisis, but believes it will not meet the fate of the textile industry.
“This is because the crisis in the home appliance industry has come as a direct consequence of factors that can be reviewed, discussed and eliminated,“ he said.
Some of the goods produced by home appliance manufacturers are of poor quality, but this is not a general trend.
“Certain brand names pertaining to heaters, water coolers and even washing machines meet the required standards and, for the same reason, are selling very well in the domestic market,“ he said, admitting that some brand names produce poor quality goods.
For instance, the electronic parts of major domestic home appliances meet the standard requirements.

Challenges
Investments have been made in the domestic home appliance industry over the past few years and competition is tough, but the main challenge to domestic manufacturers is posed by the continuing smuggling of foreign-made home appliances.
Smuggling also threatens jobs and even the industry itself.
The official urged the government to limit home appliance imports and support domestic manufacturers. He also said marketing and after-sales services are crucial to the turnover and should be in place across the nation.
“Sadly enough, these two important factors plus lack of research and development have been neglected by manufacturers to a great extent,“ he said.
Many consumers prefer foreign brands that are cheaper. Although these cheap imports are of poor quality and lack after-sales services, they still sell very well in the domestic market.
In the long run, healthy competition can help develop the industry. To do its bit, the Home Appliance Council has devised a comprehensive plan for overseeing after-sales service.
Commenting on smuggled home appliances, he said some of the smuggled or imported goods do not meet the national standard requirements.
However, the profits involved in smuggling goods appear to be extensive, and that explains why they easily find their way into domestic markets. They do so by avoiding border checks by using small boats and smuggling tunnels.
Iranian manufacturers make small profits and face big problems. Ensuring a proper supply of raw materials is very difficult, as it is monopolized by state-owned companies.
To get the industry out of the current crisis, it is vital to confront smuggling, restructure the home appliance industry, cut down production costs, invest more and support smaller production units.

Products exported by China to Iran include home appliances, textile and garments.

Iran-China relations date back to many centuries. The Parthians and Sassanids had various contacts with China, which were strengthened via the Silk Road after the advent of Islam.
Today China finds Iran a potential export market and a source of meeting its growing energy demand.
According to Moj News Agency, Zhuhai Zhenrong Corporation, a Chinese state-run company, signed a 25-year contract in March 2004 to import 110 million metric tons of liquefied natural gas (LNG) from Iran. This was followed by another contract between Sinopec and Iran in October of the same year. The deal worth $100 billion adds an extra 250 million tons of LNG from Iran’s Yadavaran field to China’s energy network.
Iran-China trade has increased from $3.3 billion in 2001 to $9.2 billion in 2005. Based on the latest statistics, China is currently the top exporter to Iran with exports reaching $2 billion, followed by France.
United Arab Emirates and Germany are the third and fourth biggest exporters to Iran respectively.
China’s exports to Iran have registered a rapid growth rate in the past five years.
Iran’s imports from China rose by 100 percent between 2000 and 2005. Apart from China’s inexpensive and poor quality products, which are largely preferred by profiteers, Iran favors buying more from China for strategic reasons.
The two countries complement each other: China has the industrial edge and political clout while Iran’s shine is due to its energy resources and geopolitical location.
Iran and China have pledged to make further efforts to develop ties and cooperation at all levels. Their bilateral ties, which have been nurtured by both for decades, are growing exponentially. This is primarily because of China’s insatiable energy needs and Iran’s increasing hunger for consumer goods and new technology, as the economies of both countries continue to expand.
China’s main imports from Iran are crude oil and LNG. Other imported goods are chrome, cotton, polyvinyl chloride, synthetic rubber, raisin and pistachio. Products exported by China to Iran include home appliances, textile and garments, in addition to mechanical and electrical equipment as well as chemical products.
Over the past six months, China has become the second largest importer of crude oil from Iran after Japan. It purchases 10 percent of its crude oil supplies from Iran.
However, Chinese products dominating the Iranian markets fail to meet the standard requirements of Iran.
According to the Institute of Standards and Industrial Research of Iran, a large part of Chinese exports to Iran, which does not meet the standards, are returned, whether they are washing machines, formula milk or cosmetics.
Iranian market players categorize Chinese goods into three groups on the basis of their quality. They complain that Chinese producers only export third-grade products to Iran.
Despite official efforts and market complaints, substandard Chinese products are flooding Iranian markets. It is in the interest of China to prevent the export of such goods.
The long-term adverse impact of a bad trade image is economically far more than the quick profits made in the short run.