Miele International, a German manufacturer of high-end home appliances, said Wednesday that it will keep its premium pricing strategy despite expectations that the company could lower product prices here following the Korea-EU free trade agreement.
Markus Miele (Miele Korea)
“We also do not consider any dramatic price increase for now, even though raw material costs have soared recently,” Markus Miele, the fourth-generation family representative and co-chairman of Miele, said during a press conference at the Korean branch’s renovated showroom in southern Seoul.
“We have well-positioned as a premium brand. Producing more than 60 percent of our product components by our own, we focus on product quality, not price,” he said, adding that the company has maintained product prices over the past years unlike other competitors.
Founded on a tradition of German craftsmanship in 1899, Miele has been a global leader in its core products such as washing machines, vacuum cleaners, refrigerators and more recently built-in kitchen appliances.
And the company is seeking its dominance as a premium brand in the Korean market, which is still dominated by local domestic manufacturers.
“Korea is one of the fastest growing markets for us. We have great interest to see how the Korean team has been reaching the growth target all the time,” said the chairman who was scheduled to look around retail shops here, including those in the southern port city of Busan.
The company logged sales of $4.1 billion globally between July 2010 and July 2011, a 4 percent growth from the previous year.
In the same period, Miele Korea saw a 30 percent increase in sales.
Even though the presence of local electronics giants such as Samsung and LG is becoming more apparent in the global market, the Miele chairman saw no competition, saying his company is targeting a different and high-end market segment.
“The Asia market is still new for us. We have seen good performance in Korea, Singapore and Hong Kong but have not yet reached our goal. We expect a stable growth there in the coming two to three years,” he said.
When it comes to securing its premium positioning, quality has always been the top priority for the German firm. And that was the reason why company executives never agreed to establish a production line outside Germany, including in Korea, Ahn Kyu-moon, CEO of Miele Korea, added.
In recent years, the company has concentrated on developing its new growth engine: smart grid products. Miele has invested almost 5 percent of its annual revenue in related research and development activities.
By Lee Ji-yoon (
jylee@heraldcorp.com)
