What comes to mind when you think of high-end kitchen home appliances? Many consumers will name off brands such as Sub-Zero, Miele, and Viking. It goes without saying that the aforementioned manufacturers produce beautiful, and equally expensive, home appliances, however two European companies are emerging to take the lead in the luxury appliance segment: Bosch and Electrolux.
Interestingly, although both companies are European, very few of their products are actually manufactured in Europe. Bosch operates a large manufacturing plant in North Carolina and additionally, a manufacturing plant in Turkey. Electrolux products are manufactured in the US excluding refrigerators, which are built in Mexico. Notably, Bosch’s less expensive ranges were built by Electrolux until very early this year.
Although Bosch and Electrolux compete in the increasingly crowded mass-premium segment, Bosch has its higher-end appliances in its Thermador brand, while Electrolux is very well known for Frigidaire, its value segment. Currently, Electrolux is the world’s second largest home appliance manufacturer by revenue (after Whirlpool), largely due to the popularity of Frigidaire. As indicated in the chart below, Electrolux occupies 73% of the retail market share when comparing the two brands within the gap intelligence panel. It can be safely stated, that due to the large placements of Frigidaire products across all retail channels, Electrolux has secured a strong holding over Bosch.
Demographically, the higher-end appliances fulfill a niche with homeowners looking to build their dream kitchen with professional grade appliances paired with user friendly functionality. If a consumer is looking to choose between Bosch and Electrolux, it may come down to brand loyalty, brand recommendation, and availability. Average prices for the premium appliances are currently set at $3,321.
As the housing market continues to rebound in the United States and interest rates are at a record low, home appliance manufacturers are seeing increased revenues. Simply put, as people buy homes that they will need appliances. It will be interesting to see where exactly the luxury segment fits within this increased demand. Will consumers splurge or save in their spending habits?
