German brand Miele is no longer a premium appliance brand with appliances from the likes of V-Zug, Gaggenau and Sub Zero now the must have top end premium appliances brands, being sold in Australia claim industry experts.

According to some leading appliance retailers Miele is only an affordable premium brand today, with top end customers moving to a new generation of premium appliances that cost tens of thousands.

At IFA this year Miele took to copying the likes of Samsung and LG with a cheap stick vac and a clothes management cabinet similar to what LG has been selling for four years, as they look to move down market to generate revenue.

One of the really hot new premium brands is V-Zug which is Switzlands leading white goods appliance brand and despite the staggering price of their appliances with ovens selling for up to $10,000 , they are appealing to a section of the market in Australia where money is not an issue, with at least one retailer looking to join the likes of Winnings and of late the Bing Lee own Signature appliance stores in the sale of seriously top end appliances.

Outside Switzerland, the brand is barely known, however there is one market where the brand is proving popular and that’s Australia with the business recently recruiting a business development manager to handle growth opportunities.

But in Switzerland V-Zug’s premium, high-technology ovens, washers and dryers rank alongside other top names such as Gaggenau, the only problem is that local Swiss sales have started to slow.

Currently the Swiss business is looking to grow markets such as Australia with Jürgen Dormann, the veteran European industrialist and chairman of the Metall Zug holding company, working on a new export strategy, which could see several new products launched into the Australian market in the future.

According to the financial Times V-Zug has already begun re-designing and re-engineering its appliances for foreign markets and set up the distribution and service networks essential to service these markets with Australia tipped to be a high priority.

This financial year V Zug sales rose by 5% last year to over A$700M, while operating profits for the company, which has 1,500 employees, slipped 5% due in part to their investment in new products and a move into markets outside of Switzerland.

Their latest ovens include measuring and temperature software allows users to enter in a programme the type of meat, how thoroughly it should be cooked and when the joint should be ready and leave the rest to one of their ovens.

The Company has realised that they need to constantly to innovate to stay ahead with the business now investing in a new generation of processor and digital technology for their appliances.

The Financial Times in Europe recently reported that V-Zug believes there is room for an additional premium brand internationally as rising world affluence creates new, status-conscious buyers deterred by the mass brands and aware that some “independents”, such as Gaggenau and Sub Zero, who have become the domain of the likes of Winning who while struggling financially is now having competitors eying off a market they have traditionally competed in for growth.

Tyler Brûlé, a journalist and branding specialist said ““Given the consolidation in white goods across Europe, many consumers are increasingly sceptical of premium brands offered by some groups, as they know they’re getting the same tumble dryer with a slightly fancier finish”.

“It’s in this territory V-Zug has an opportunity to sell its ‘Swissness’ and solid reputation to buyers who want a status item in their kitchen that’s matched with quality.” he added.

Currently Miele is moving to expand their own stores in Australia, at the expense of retail partners, who have helped them to grow in Australia, with this appearing to be more about the German brand who have a fetish for controlling pricing and maximising margins looking for a higher ASP which they believe they can get via their own stores Vs partner stores who basically after handing a customer over to Miele lose their relationship with that customer.

“We are number one in Switzerland and have extended our lead,” says Werner Rellstab, the company’s long-standing chief executive until June, and now a board member told the Financial Times.

“About two-thirds of our sales and output are ovens and dishwashers, the rest being washing machines and tumble dryers.”

In Australia local management believe that there is an opportunity to sell the ‘Swissness’ of the V-Zug brand and its solid reputation in Europe where it has become a status symbol in European and now Australian kitchens.

Mr Rellstab reckons exports could rise from about 2 per cent of sales today to SFr100m a year, or 15-20 per cent of sales, within the next 7-10 years.

Market data suggest that what could benefit the likes of Sub Zero, V Zug and the likes of BSH owned Gaggenau is an expansion in retailers selling their brands in display stores where architects, kitchen designers and project managers take their clients to pick their appliances and the technology they now want in a premium house build.

In Mosman this year there has been at least 10 houses built where the build costs alone are over $10M.

In suburbs like these as well as the likes of Malvern, Brighton and Toorak in Victoria resilient demand for premium products is still driving the market.

V Zug is punting on automation to help them control costs, however analysts from the likes of GFK claim the Company is facing difficult market conditions and a Swiss franc that has appreciated against most other currencies, squeezing margins.

In Australia the business is also facing having to build out an unfamiliar brand in a market that in the past thought Miele was a premium brand.