Household Appliance Manufacture Industry Profile

The US household appliance manufacturing industry consists of about 300 companies with combined annual revenue of more than $20 billion. Major companies include GE, Whirlpool (owner of the Maytag brand, among others), and the US-based operations of Electrolux. The industry is highly concentrated: the top 20 companies generate about 85 percent of revenue.

COMPETITIVE LANDSCAPE

Demand is driven by growth in consumer income and by home sales. The profitability of individual companies depends on efficient operations and effective marketing. Large companies have economies of scale in production, marketing, and distribution. Small companies can compete effectively by producing specialty products, subcontracting to the larger manufacturers, or producing name brand goods under contract. The industry is capital-intensive: average annual revenue per employee is about $310,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major product categories are refrigerators and freezers (about 25 percent of industry revenue); washers and dryers (20 percent); and ovens and ranges (20 percent). Other products include dishwashers, fans, microwave ovens, vacuum cleaners, water heaters, and other small and large electrical appliances.

Most appliance makers produce the body of their product from steel and plastics, and buy components like electric motors, compressors, heat elements, and controls from suppliers. Manufacturing operations consist largely of shaping metal in stamping presses with custom-built dies and assembling components. Steel, either cold-rolled, hot-rolled, or galvanized, is the major raw material. Plastics are used in making vacuum cleaner parts, as an insulating material in other products, and for ...