Europe’s backyards have become the latest front in the robot wars.
With a quarter of lawn owners saying they dislike mowing the grass, sales of machines that will do the job for them are taking off, especially in Europe where landscaping services are more expensive than in the U.S.
That has spurred a legion of manufacturers to challenge market leader Husqvarna AB. (HUSQB) Robert Bosch GmbH, Deere & Co. (DE) and Global Garden Products Italy SpA this year started offering robotic mowers, which Husqvarna sells for as much as 5,000 euros ($6,487). Honda Motor Co. (7267) plans to enter the fray in 2013.
“We felt we had to get on board,” said Thomas Olsson, head of Swedish operations at privately owned Global Garden Products. “For the first time you hear that people exchange relatively new manual mowers for robots.”
The market for hands-free mowers, which expanded by more than 30 percent last year, offers a rare bright spot in Europe’s consumer climate. The European market may grow as much as 20 percent annually over the next five years, Olsson said. Most of the customers are in Sweden, Germany, France and Switzerland -- countries that have so far proven resilient to the debt crisis.
Demand for the garden robots has “exploded the last couple of years,” said Mats Gustafsson, owner of Moheda Jarnhandels AB, a hardware store in the southern Swedish town of Moheda. Gustafsson said he’s sold almost 60 robomowers this year, compared with fewer than 10 five years ago.
“It’s still a niche market in Europe as a whole, but it’s growing so fast so that in some countries it’s now starting to be a mainstream segment,” said Henric Andersson, head of product management and development at Husqvarna. With time, “it may be as big or bigger than regular mowers” in some countries.
Six percent of the value of all mowers sold in Germany are now robotic, and the country’s automatic mower market is growing in “double digits,” according to research company GfK Retail and Technology GmbH.
Husqvarna, the former Electrolux AB unit that produced the first robotic mower in 1995, has six models that can care for lawns ranging from 400 square meters (4,306 square feet) to 6,000 square meters. Outside of Europe, it mainly sells the mowers in Australia and New Zealand.
The Swedish company brought the product to North America in 2001, only to retreat a year later after concluding the market wasn’t ready. In addition to the greater use of landscaping services by U.S. homeowners, North American grass, especially in the southern U.S., is generally tougher than European varieties, making it difficult for the machine’s fine blades to work effectively, according to Husqvarna.
Bosch, the world’s largest supplier of car parts, entered the robotic mower market last month when it started selling its Indego machine in Scandinavia. Deere, based in Moline, Illinois, joined the rivalry earlier in the year with the John Deere Tango E5, which it sells in Austria, Belgium, Luxembourg, Norway and Switzerland.
Global Garden Products, based in Castelfranco Veneto, Italy, bought its way into the $170 million market in January when it acquired LiCo srl’s Lizard mower marque, and rebranded those machines under its Stiga brand.
Andersson declined to discuss Husqvarna’s market share, saying only “we’re clearly the market leader.”
The mowers use sensor technology to stay within a defined area of the yard, and are typically able to avoid obstacles such as trees and lawn furniture. Some of the mowers, including those made by Husqvarna, move around in random patterns, while others such as Bosch machines follow distinct lines. Unlike traditional mowers, they don’t collect the cut grass, as the clippings are so small they break down fast and act as fertilizer; instead the rechargable mowers are used frequently, often daily.
The price of robotic mowers may be barrier to their success. Husqvarna’s models start at 1,700 euros. Most electric walk-behind mowers sell for 300 euros to 900 euros.
Prices will come down, and when they’re inexpensive enough the market will become mainstream, according to Husqvarna’s Andersson. About 1,000 euros may be “a magical line for the customer,” he said.
Robots aren’t only gardening, they’re also cleaning the house. Sensor-loaded machines have grabbed a 6.1 percent share of the European vacuum-cleaner market, according to GfK. The market has grown about seven times over the last three years and is now worth about 205 million euros in the region, the researcher reports.
Their success also offers a cautionary tale for pricing. Electrolux AB, (ELUXB) the world’s second-biggest appliance maker, was first to introduce the robot vacuum cleaner in 2001 and after reaping little success stopped making the product in 2009.
“The development costs were too high so the retail price became too steep,” Electrolux spokesman Erik Zsiga said. “Sales just weren’t big enough.”
Companies that still make robot vacuums include Siemens AG, (SIE) Samsung Electronics Co. Ltd. and iRobot Corp., which raised its earnings forecast in July after sales beat estimates. An Electrolux Trilobite vacuum cleaner retailed for more than $1,500 before it got pulled from the market, while an iRobot Roomba can be bought on Amazon today for as little as $300.
Electrolux’s limited success with robotic appliances isn’t discouraging Honda from betting on auto mowers. The Tokyo-based company said in August it will start selling a machine called the Miimo in Europe next year.
“The competition is really stiffening up,” said Johan Dahl, an analyst at Erik Penser Bankaktiebolag in Stockholm, who has a hold recommendation on Husqvarna’s shares. “But there should be room for more players to compete profitably.”
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