An interesting alternative for today's high efficiency variable speed drive is the Permanent Magnet-Assisted Synchronous Reluctance Motor (PMa-SynRM) drive. Generally, the reluctance torque of this motor is significant compared to the permanent magnet torque. This advantage of increased reluctance torque lends itself well to less use of expensive permanent magnet materials. Therefore, this solution will be cheaper than similar permanent magnet synchronous motor and also holds promise for an extended flux weakening operation. Due to its synchronous operation, speed sensorless control is possible along with higher power factor and better efficiency compared to induction motors. This paper implements vector control strategy for speed control of PMa-SynRM that is applied to a direct drive washing machine. It focuses on the sensorless speed control of the PMa-SynRM. Sliding mode observer technique is used to take advantage of the lower costs as well as increased system reliability which otherwise is not possible using the delicate speed or position sensors. The only requirements of the observer-based speed control system are use of digital signal processor, specialized and optimized to perform complex mathematical calculations. The feasibility and effectiveness of the control techniques are verified experimentally employing Texas Instruments TMS320F2812 eZDSP controller board and the overall PMa-SynRM drive system.