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Foreign Appliance Firms Go After U.S. Upscale Market
Apr 5, 2004
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European appliance makers Siemens and AB Electrolux are introducing new lines of premium products in the U.S., joining the growing number of companies seeking to profit from a consumer shift to high-end goods.

The European companies unveiled new products at the Kitchen and Bath Industry (K/BIS) trade show, which was held April 2-4 at McCormick Place in Chicago, IL, U.S. and attended by APPLIANCE magazine editors.

Siemens Home Appliances, a unit of the BSH joint venture between Germany's Robert Bosch and Siemens AG will start selling stoves, washers, and dryers at retailer Best Buy Co. in May 2004 priced starting at U.S. $879.

The target audience is "consumers with a strong sense of style and a passion for technology," said Michael Bohn, brand marketing director at Siemens. "We believe they are not very adequately catered to now."

The company said its products, made at a Siemens plant in North Carolina, U.S. have features such as child safety lock-out for the range and a washer sud sensor.

Sweden's Electrolux, the world's biggest appliance maker whose brands include Frigidaire, is unveiling seven products featuring stainless steel and glass under the Electrolux Icon name. The products, priced from $999 to about $2,499, will be sold at upscale appliance retailers.

The luxury entrants arrive as a strong U.S. housing market boosts sales of large appliances.

Americans are showing a willingness to pay more for appliances. In refrigerators, for instance, products priced at more than $1,000 constituted 26 percent of units sold in 2002, up from 18 percent in 2000, according to the Boston Consulting Group.

"Consumers are saying they want convenience, time savings, [and] safety," said Keith McLoughlin, president of Electrolux Home Products for North America,.

The European offerings join a market segment that U.S. makers are saturated with new products.

Laura Champine, an analyst with Morgan Keegan, said the European entrants will compete with Maytag's Jenn-Air, Whirlpool's KitchenAid, and GE's Monogram and Profile premium lines. "But I don't expect that they are major threats," Champine said.

Asian makers LG Electronics and Samsung Electronics, whose products are sold at Best Buy, are also looking to broaden their U.S. high-end offerings. LG currently sells an $8,000 Internet-ready refrigerator, while Samsung makes side-by-side fridges and microwaves.

Champine said manufacturers were challenged to add features to appliances that truly bring value.

"With the exception of front-loading washers and dryers, there hasn't been a lot of market-moving innovation at the high end for a while," Champine said. "So you're selling a look or a brand." (Reuters)

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