While the housing crash has hit appliance providers as hard as home builders, it also has offered more of an opportunity to compete for bigger shares of the market that remains.

Builders have been streamlining their businesses for the sake of cost savings and efficiencies, whittling down the number of floor plans, the variety of materials and options they offer, and, in the case of appliances, sometimes choosing one exclusive provider rather than multiple manufacturers.

"In this downtime period, we have found for a number of years that builders are questioning what they have been doing in the past," said Tom Halford, Whirlpool Corp.'s general manager, contract sales and marketing. "So they are open to change. There is an opportunity that allows us to share our voice with the home builders."

And more have been listening to--and going for--Whirlpool's sales pitches, with Toll Brothers, Shea Homes, Ashton Woods Homes, and Horton Homes all opting for Whirlpool in 2010. "We are up nearly 50% in single-family, new-home construction [market] share since 2008," Halford said. "It's pretty fragile still. We are still having to deal with price advantages."

Of course, along with the opportunity to gain market share comes the possibility of losing it as well.

"Somewhere along the line here there are going to be winners, and there are going to be losers," Halford said. "It's just the outcome of a competitive environment. Right now we are fortunate to be very competitive."

Given that level of competition, perhaps it's not so surprising that, in the past year, GE's and Whirlpool's announcements of new exclusive agreements to provide major production builders' appliances have been popping out like dueling front-runners in a horse race.

  • In late August, GE announced it had signed up Lennar Corp. and Clayton Homes, the largest manufacturer of modular homes in the United States, to exclusive four-year agreements.

  • In early October, Whirlpool announced it had landed "multi-year" exclusive agreements with Mattamy Homes and PulteGroup.

  • Then, last Thursday, GE announced it had obtained an exclusive three-year appliance provider agreement with Ryland Homes. Rose said it has signed an exclusive agreement with D.R. Horton as well, but hasn't issued a news release yet.

Matt Rose, general manager of GE Appliances & Lighting's contract sales division, would agree about the current sales environment. "It's definitely a competitive marketplace and probably has never been more competitive," he observed.
But Rose said that GE, which says it remains the No. 1 supplier of major appliances to U.S. home builders, hasn't really changed its message much in response to the competition. "We are sticking to our principles, which really is our value proposition," he said. "It's one that they seem to respond to," particularly in a housing market where builders are looking to cut every dime they can from their hard costs.

GE also pushes its product quality, delivery network, and the fact that it provides its own in-house service technicians. "Some of our competitors have outsourced that to third parties," Rose noted.

Meanwhile, Whirlpool is pushing the breadth of its offerings, which starts with Amana, goes through Maytag, and finishes up with KitchenAid and high-end Jenn-Air brands. "Whether it's a first-time buyer or a fifth-time buyer, we've got brands to fit all those consumers," said Halford. "We have the right brands (for different types of) builders, but also for the different types of homes within a builder" portfolio.

"We wouldn't be successful in this industry with one brand because eventually it would come down to is price competition," Halford said. "Though we have to compete on price, we have to compete beyond price."

Teresa Burney is a senior editor for BUILDER and BIG BUILDER magazines.