Italy: Go-Go Appliances

As secretary of the domestic-appliances division of a trade organization called the National Association of Electro-Technical Industries, Bruno Bonarini acts as spokesman for Italy's thriving home-appliance manufacturers. Lately, Bonarini speaks as if he were wearing the purple. "We have conquered the European market," he observes imperially. "Now we are beginning to look to new horizons—the U.S. in the West and the Soviet Union in the East." Considering what Bonarini's legions have accomplished in Europe, West and East had better watch out.

World's Third. Common Market statistics demonstrate the point. Of 5,000,000 refrigerators produced in the market's six member nations last year, 2,800,000 were Italian; this year, 3,000,000 will be Italian. Of 4,500,000 washing machines, 1,700,000 came from

Italy; this year, 2,000,000 will. Italian companies also turned out 1,600,000 of 4,000,000 stoves last year, 1.500,000 of 3,900,000 TV sets and a rapidly rising share of home freezers, newest Common Market consumer attraction. In 1950, Italy trailed every European nation except Spain and Portugal in appliance output; last year it was third in the world, after the U.S. and Japan. "Domestic appliances," notes the Milan newspaper, 24 Ore, "are to Italy what watches are to Switzerland."

Altogether 115 Italian companies make appliances, but the bulk comes from six—Ignis, Zanussi, Zoppas, In-desit, Candy and Castor. Using newer, more automated plants than their competitors, the Italians ignore Europe's traditional luxury market to concentrate on a high volume of low-cost models for prospering workers. They cut heavily into the German washing-machine market by offering $250 washers v. the $375 lowest price for German machines. When the Germans stripped down their luxury models and reduced prices to match, the Italians cut their price to $150.

Doing as the Romans Do. Inevitably, other European appliance companies have suffered. Three major Belgian manufacturers have discontinued refrigerator production. General Motors (France) may soon stop making them too, and Whirlpool Corp., after only four years of European operation, has sold plant and Pontiac brand name to French companies. British manufacturers have decided to do as the Romans do: Hoover's English subsidiary markets Zanussi-made refrigerators under a Hoover label, and British Hotpoint lets Zoppas make its washers.

Alarmed by the trend, other Europeans charge that the Italian government unfairly aids manufacturers by allowing quick write-offs on their automated machinery and by handing back more in export rebates than it takes out in turnover taxes. France, when the Italians suddenly grabbed 221% of its refrigerator market in 1962, complained that Italy was exploiting sweatshop labor. It thus won Common Market permission to impose a "compensatory" tax on such imports while French industry modernized to meet the competition. After the tax was repealed, the French tried raising import duties and imposing inordinately rigid border inspections in vain efforts to stem the appliance flow. Now. France is considering an official protest to the Common Market Commission.