Siemens goes middle class with washing machines
By Usha Somayaji | 07 Aug 2000
1
BSH Home Appliances, a 100 per cent subsidiary of Bosch and Siemens, Germany, has announced the launch of its WM 2020 front loading tumble washing machine. Priced at under Rs 20,000 and sold under the Siemens brand, the new product is aimed at the mid-segment of the market. Simultaneously, the company has also extended its refrigerator range with the launch of a 335 litre frost-free version, the KS 30U 01 IN-335.
This marks yet another step in Siemens' foray in the white goods sector in the Indian market where it has been selling washing machines, refrigerators and dishwashers since October 1997. Now it is even contemplating local manufacture.
"A decision on local manufacture will be taken by December," said managing director Mr. Vipul Raval. "It would depend on the breakeven and volumes."
While the company has been selling washing machines in the premium segment ever since its entry into India, this time it has stepped down a rung into the mid-price segment so as to cash in on the bigger market. Of the estimated 1.2 million washing machines sold in the country annually, 260,000 are fully-automatic, of which 82,000 come from front-load tumble washers.
"Siemens' strategy has been to enter with the top or premium product quality or technology, consolidate our market, and then move on to the middle and mass segments," says Mr Raval.
With washing machines, however, the strategy was to bring down the price by cutting down on the frills, while keeping the technology intact. Thus many features that were rarely used by Indian users were discarded in the WM2020, which helped cut down the price by Rs 6,000 to bring it below Rs 20,000.
But Mr Raval rules out entry into top-loaders and semi-automatics. The technology used in these machines, he says, is less environment-friendly, leading to higher consumption of water and detergent. "All other front-loaders use 100 litres of water per wash as opposed to the Siemens M2020 which uses 65 litres. Top-loaders, on the other hand use, over 200 litres of water," he says.
He quotes a similar reason for the non-entry of Siemens in the 165 litre segment of refrigerators. "Our refrigerators are CFC free and we are working towards making them HFC free. This technology is not available for smaller refrigerators."
The entry into the mid-segment of the washing machine market, Mr Raval hopes, will help the company achieve five per cent market share in the fully-automatic segment and 15 per cent in the front-load tumble wash segment during the current year. Last year, the company's share was 10 per cent.
The combined turnover of the company on washing machines, refrigerators and dishwashers last year was Rs 20 crore. It is targeting over Rs 30 crore this year, at which level the company would break even. Siemens has planned an expansion of its distributor network from the current 250 dealers to 450 by mid-2001 to help it achieve its targets.
This marks yet another step in Siemens' foray in the white goods sector in the Indian market where it has been selling washing machines, refrigerators and dishwashers since October 1997. Now it is even contemplating local manufacture.
"A decision on local manufacture will be taken by December," said managing director Mr. Vipul Raval. "It would depend on the breakeven and volumes."
While the company has been selling washing machines in the premium segment ever since its entry into India, this time it has stepped down a rung into the mid-price segment so as to cash in on the bigger market. Of the estimated 1.2 million washing machines sold in the country annually, 260,000 are fully-automatic, of which 82,000 come from front-load tumble washers.
"Siemens' strategy has been to enter with the top or premium product quality or technology, consolidate our market, and then move on to the middle and mass segments," says Mr Raval.
With washing machines, however, the strategy was to bring down the price by cutting down on the frills, while keeping the technology intact. Thus many features that were rarely used by Indian users were discarded in the WM2020, which helped cut down the price by Rs 6,000 to bring it below Rs 20,000.
But Mr Raval rules out entry into top-loaders and semi-automatics. The technology used in these machines, he says, is less environment-friendly, leading to higher consumption of water and detergent. "All other front-loaders use 100 litres of water per wash as opposed to the Siemens M2020 which uses 65 litres. Top-loaders, on the other hand use, over 200 litres of water," he says.
He quotes a similar reason for the non-entry of Siemens in the 165 litre segment of refrigerators. "Our refrigerators are CFC free and we are working towards making them HFC free. This technology is not available for smaller refrigerators."
The entry into the mid-segment of the washing machine market, Mr Raval hopes, will help the company achieve five per cent market share in the fully-automatic segment and 15 per cent in the front-load tumble wash segment during the current year. Last year, the company's share was 10 per cent.
The combined turnover of the company on washing machines, refrigerators and dishwashers last year was Rs 20 crore. It is targeting over Rs 30 crore this year, at which level the company would break even. Siemens has planned an expansion of its distributor network from the current 250 dealers to 450 by mid-2001 to help it achieve its targets.
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