Germany’sBSH Appliances launches Gaggenau, its third luxury brand

Despite high import duties and GST, BSH Household Appliances has decided to introduce its luxury built-in appliances brand Gaggenau as part of a segmenting strategy in its household appliances portfolio.

While italready has its two brands – Bosch and Siemens – at the mass and premium end, Gaggenau, its third luxury brand, is expected to complete its portfolio in India.

“India is not one market and we need to have distinct segments in home appliances. Instead of diluting one brand, we are having different brands for different segments,” said Gunjan Srivastava, MD & CEO, BSH Household Appliances.

The German multinational has already set up a base in Chennai to manufacture about 3-lakh front-load Bosch washing machines per year . “We are seeking lower price points and formats for washing machines, and currently make about 70 per cent of it in India as we want to go mass with Bosch,” he said.

It is even considering the manufacture of the rest of the categories such as refrigerators and dishwashers under Bosch with more suitable price points to cater to the Indian market, as it continues to have single-digit shares in most of the categories.

Currently it has a share of 7-8 per cent in front-load washing machines, and claims to be growing at 40 per cent in the Indian market.

However, low-volume brands such as Siemens, and the newly launched Gaggenau, would be attracting steep import duties.

“Today the basic import duties are at 10 per cent. We would look at manufacturing only if there are significant volumes. Even GST at 28 per cent is too high for the category since household appliances is a not a luxury but a necessity,” he said.

But as the ecosystem is not conducive for the manufacture of high-end premium categories, it may take a while for local production.

Besides it is not in a hurry to apply for FDI, but continues to evaluate the same. “We are looking at the FDI options but may not apply for it immediately. FDI helps in retail where there is the need for brand ownership. Our stores are owned by franchises currently. Since the depth and width of distribution is large in household appliances, we may not have the need to own our stores,” he added.

Apart from its presence across multi-brand outlets, it has more that 50 exclusive stores under Bosch and 30 under Siemens, which are run through franchisees.

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