Washing machine manufacturers Australia-wide are in for a shock from the Western Australian Water Corporation, which has distributed notice that from 1 January 2008 the eligibility for washing machine rebates will be lifted from a Water Efficiency Labelling Scheme (WELS) star rating of four to 4.5.
The Western Australian Government currently offers consumers who purchase a four-star washing machine a $150 rebate, as an incentive to save precious water deposits. However, from next year manufacturers that can’t keep up will lose out to those which are on-the-ball, offering more environmentally-friendly solutions.
SmartHouse News spoke to various prominent local washing machine-makers about the issue, some of which took it on the chin while others are up in arms about the news. But one thing is clear – manufacturers must now run to keep up with the demands of a government which is making their lives extremely difficult.
“This has huge implications for retailers and manufacturers of washing machines in Australia,” said an unnamed manufacturer.
“Everyone has 4-star rated machines – very few have 4.5! They gave us five weeks notice! This will not save water as shoppers will switch off front loaders until a cheap 4.5 offer becomes available.”
Washing machine-makers are now faced with re-engineering their product lines so they can ensure they stay on the cutting edge of the market – there are currently only 12 models available that are rated 4.5 stars and above, from brands Ariston, LG, Miele and Kleenmaid.
“Normally when there us a change of this sort of legislation we are advised years in advance,” said Omega Smeg national technical manager, John Brennan.
“We need to design and perfect new washing machines now. The highest we’ve currently got is four stars on the water rebate – and I just got another one cleared with WELS, which is a lengthy and costly process.”
According to Brennan, the government is costing whitegoods manufacturers “hundreds of thousands of dollars” to keep up with legislation. So while the customer may be happy that they’re saving water, manufacturers are losing out in a race to keep up with the water authorities.
But are the authorities honestly attempting to save water deposits or are they sick of forking out $150 a piece to customers who are purchasing 4-star rated washing machines from a rapidly-growing pool of products that reach this rating?
According to the notice sent to manufacturers this morning, since rebates were introduced in 2003, the Western Australian State Government alone has granted almost $28 million to 185,000 households.
Washing machines are the most successful product in the rebate program, which includes dishwashers and water tanks.
But a factor making this so scary for manufacturers is the possibility of other State Governments following suit. There are currently no fewer than 116 four-star rated washing machines on the market, which equals a lot of money in rebates. Of course the Government would hike the eligibility criteria if every second person purchasing a washing machine is now receiving a rebate.
“The reality is that having a four-star washing machine is a lot more common now than it was two years ago,” said Samsung Electronics product manager – laundry, Paul Liscomb.
Samsung Electronics sells a mixture and top-loading washing and the more water-savvy front-loading models, which many say are the way ahead in washing machine technology – and consequently attract the highest WELS star ratings.
“There are so many water-saving options on the market now – 50 per cent of people are already buying front loading washers. It would be uncommercial of the Government to continue that offering when people buy front loaders anyway,” said Liscomb.
According to Liscomb, designing a new product generally takes between three to six months – assuming the technology is there in the first place. With rebate eligibility becoming more exclusive, manufacturers in the next six months will hurry to put models out that meet the criteria.
“Now it will be a race to chase that magical 4.5-stars mark,” said Liscombe, who currently doesn’t have any 4.5-star rated models in his lineup.
“There will probably be a bit of a queue at the WELS office to get new models approved in the next few months.”
Washing machines that are this savvy are expensive, though – generally costing above $1,000 – and manufacturers must now ask themselves if shoppers will buy a washing machine that is $300 more expensive due to its superior star rating, keeping in mind the $150 rebate. Is it worth losing money to save water?
Miele product manager – laundry and floor care, Thorsten Kiffel, believes that the environment comes first.
“We are moving to make models more energy and water-efficient all the time. While we currently enjoy having a rare 4.5-star rated washing machine on the market, the environment is key,” he said.
Miele is one of the few manufacturers with a washing machine that meets the requirements for a rebate.
“And once the competition catches up, we’ll come up with more developments,” he said.
Brennan from Omega Smeg agrees that water rebates are a sales leverage, but he says the market isn’t sophisticated enough for rebates to affect all purchases.
“Ninety per cent of people don’t care – they just want the cheapest model,” he said.
“We’re forking out thousands of dollars to re-engineer top-notch, water-efficient washing machines, when in reality we’re making most of our money by moving cheaper models.”
