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LG Electronics India Pvt Ltd (LGEIL) has said another round of price hike is on the cards and the company will be doing so in February to tide over high commodity prices.
The company also announced a Rs 800 crore investment for 2011 in capacity expansion and marketing among others.
“We are planning another round of price hike in February as we can no longer absorb high commodity prices,” Mr Y. V. Verma, COO, LGEIL told reporters after launching a range of air-conditioners. The company had undertaken a five per cent price revision in December last year.
Prices of commodities like steel, copper, aluminium and polymers have been on an upward march since the last three months forcing industry players to reconsider price revision. Industry watchers need to note that air-conditioners, refrigerators and washing machines will be the worst hit as use of the above raw materials is highest in these products.
Meanwhile, LGEIL said it is targeting a turnover of Rs 20,000 crore in 2011 as against Rs 16,000 crore in 2010. “Products like flat-panel televisions, air-conditioners and washing machines will be our growth drivers,” Mr Verma said.
He said the company is investing Rs 800 crore towards expansion for the current year. He added that the AC market is set for an explosion and the company expects India to be ahead of the US in number of units sold.
LG Electronics Vice President (AC Overseas Marketing), Mr Sewoo Park said, “India is global number two in room AC category and it contributes about 18 per cent of our global sales. We hope next year the Indian market becomes global number one.” The global AC sales of the company last year stood at around $ 3 billion and the US accounted for 30-40 per cent, he added. LGEIL had about 29 per cent share in 2010 in the domestic AC market and is aiming for 32 per cent share by this year.
The company launched a range of 51 split and window ACs, priced between Rs 10,000 and Rs 55,000.
“We are targeting a turnover of Rs 3,500 crore from AC sales this year compared to Rs 2,500 crore in 2010,” he said, adding the company may look at expanding capacities to meet the demand explosion.
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