By Kim Yoo-chul
German-based luxurious home appliances maker Miele plans to build its first research and development (R&D) center in South Korea in efforts to pursue sustainable business growth.
The move comes after Miele has been seeing healthy business expansion in Northeast Asia with South Korea leading the way, prompting it to diversify its business portfolio.
``Yes, we have the intention to build an R&D center, here, as part of our mid-term growth strategy,’’ Markus Miele told The Korea Times in Seoul, Wednesday.
The managing director and co-proprietor of Miele is the great-grandson of co-founder Carl Miele. He was in Korea for the first time in six years to check out local department stores and key dealers after Miele Korea achieved 30 percent revenue growth for 2010 from the previous previous.
``For Miele, Asia is a truly growing market that should not lose. Miele’s Korean business looks very solid in terms of growth rate and I am bullish about the market outlook for the next three years,’’ said the company’s chief executive.
But he declined to give further details such as the location of the center, the investment and the timing as more time is necessary to study the plan.
In a separate press conference with the local media, the CEO denied market speculations that Miele has interest in buying Korea’s Daewoo Electronics, saying the German manufacturer will stick to its decades-long ``premium-branding strategy.’’
``We don’t have any intention to buy it,’’ said the CEO.
Creditors of Daewoo Electronics have rejected a demand by Sweden-based Electrolux to cut its sale price by more than 7 percent, a move that puts the deal in jeopardy once more.
Several past attempts to sell the unlisted Daewoo, which was placed under a debt-restructuring program after its parent group filed bankrupt in 1999, including a $515 million possible deal with Iran’s Entekhab have all failed.
``Questions could be raised over our product quality if Miele starts production outside our home-turf of Germany,’’ said the chief executive.
Miele has been known to produce 60 percent of the needed components used in its premium products in Germany, according to officials.
In line with its brand-focused business strategy to stick to standards, Miele is aiming to continue ``conservative pricing’’ of its products though the appliances maker is being pressurized to cut prices after South Korea’s free trade agreement (FTA) with the European Union (EU) went into effect.
``As part of our initiatives for South Korean consumers, Miele may lower the prices of some of our high-end products. It’s true that we are being pressured to alter our pricing strategy after the free trade pact, however, drastic cuts are unlikely,’’ said the chief executive.
Miele has released a new pricey product lineup that includes a so-called ``smart grid’’ management system. Miele plans to introduce new washers and small-sized coffee machines in the latter half of this year.