Financial Daily from THE HINDU group of publications
Friday, Apr 02, 2004
LG bullish on India; plans to triple growth
New Delhi , April 1
ENTHUSED by its success in the Indian market, LG Electronics Inc, parent of LG Electronics India Pvt. Ltd (LGEIL), has chalked out clear strategies to further strengthen its brand position in the country.
"LG plans to triple its growth in three years," Mr Charles Kim, Executive Vice-President, DDM Overseas Marketing Division, Digital Display & Media Company, said.
"Though volume wise China is doing better in colour televisions (CTVs), the growth rate is faster in India. In fact, India accounts for 10 per cent of the total CTV sales for the company, which is a big number for any country," he stated.
Mr Kim, who was here to meet the South Asian market heads of the company, told Business Line that, "the Indian market is of primary concern to LG Inc as it is the fastest growing market in Asia. The top management of the company is to visit India sometime next month to define the strategy for this market."
Elaborating on the functioning of the company, he said LG Electronics comprises three main business companies: Digital Display & Media, Digital Appliance and Telecommunication Equipment & Handset.
Digital Display & Media Company provides core technologies for cutting-edge digital products. It is a major player in digital display products including plasma TVs, liquid crystal display (LCD) TVs and monitors, and digital high-definition televisions (HD TVs). It also provides digitally integrated products such as AV systems, optical storage, set-top boxes and home servers and is focusing on next-generation businesses such as home and mobile networks.
"LG Inc plans to be number one by 2007 in the South Asian market," Mr Kim said. On whether telecom would be the major growth driver for the company, he said, "Telecom will no doubt accelerate the growth, but the new display panel (NDP) will be the core part for growth."
Of the total TV market, NDP category comprises 67 per cent and LGEIL's contribution is more than 10 per cent.
Agreeing that market taste would be shifting to the LCD and NDP categories in the long-term, he revealed that the current market size for LCD is seven million units. Asia accounts for one million units. With regards to the local market, he said, "India will sell at the rate of 5,000-6,000 units per annum."
In concurrence with the views of other prominent players in the market, Mr Kim too felt that pricing plays a vital role in this segment. "Overall the prices have decreased by 30 per cent, it is expected to fall further because of large scale production."
On the issue of research and development, Mr Kim stated that the company spends about 10 per cent of its total turnover in research and development. In India, the company already has one R&D facility at Noida and another one is coming up at Pune. This is apart from LG Software India Ltd, which is a separate software development entity in Bangalore.
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