Cash for clunkers could help appliance industry . . . but companies might have to wait to see benefits

Year-over-year shipments of major appliances dipped 6.7 percent in September, according to the Association of Home Appliance Manufacturers. This decline keeps the recession-ravaged industry in the red for the year compared with 2008, but following steeper drops in shipments the two previous months—9.4 percent in August; 19.1 percent in July—the outlook for appliance makers might be improving.

The Consumer Reports Index for September showed a similar uptick in "majaps," industry lingo for major appliances like refrigerators, dishwasher, ranges, washers, and dryers.

Amid the industry's cautious optimism over the upswing is concern that the nascent recovery could be squashed by the U.S. Department of Energy's $300 million State Energy Efficient Appliance Rebate Program, otherwise known as cash for clunkers for appliances. That's because many states won't roll out the rebate program until early 2010, keeping prospective buyers on the sidelines.

The appliance industry yesterday held what it labeled the "Federal Appliance Rebate Media Briefing." During the teleconference, one reporter asked representatives from Bosch and Sears whether they're concerned that sales will be hurt by the delay in launching cash for clunkers for appliances. "Half of appliance purchases are based on upgrades or people moving into new homes. Those sales might be delayed. But you really can't delay a broken washer or a refrigerator that's not working," responded Doug Moore, president of home appliances for Sears.

John Farley, senior brand and environmental-marketing manager for Bosch Home Appliances, conceded that promotion of cash for clunkers for appliances might be a bit premature. But he added that it "has driven a lot of conversation in the press to raising awareness of the benefits of high-efficiency appliances. As awareness is raised, consumers go online and find out that there are [other] rebates available right now." Farley plugged the Bosch Rebate Resource Center, which includes special offers from Bosch alongside details about individual state incentives. One example: Bosch is offering a $100 to $200 rebate (in the form of a prepaid Visa card) on the purchase of any eligible Vision series washer. (We're expecting  manufacturers and retailers to introduce pages on their sites where you can find information on rebates related to cash for clunkers.)

Whether you're going to buy new appliances now or wait for the cash for clunkers kickoff, we recommend you consider not only how efficient a product is but also its performance, reliability, and cost.

For example, the Bosch Vision 500 Series WFVC5440UC front-loader, earned an excellent score for energy and water efficiency. But the $1,100 front-loader's washing performance was just middling—most front-loaders deliver much better washing performance. What's more, based on its vibration and noise test results, you might not want to install this model near main living spaces or on a second story with standard wood-suspended floors.

As always, we'll keep you up to date on the new models we've tested in our Inside Consumer Reports Test Labs posts and the latest news surrounding cash for clunkers for appliances.—Daniel DiClerico | e-mail | Twitter | Forums | Facebook

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