LG to drive 5 star AC sales; targeting 40% growth in 2019
Korean white goods maker LG Electronics is going to push for sales of five star air-conditioners this summer by halving the price difference between these models and the three-star variant, a senior company executive said.
This strategy is also going to boost the company’s value share in the Indian market where it wants to attain value leadership this year.
LG India vice president (home appliances and AC) Vijay Babu said the company has dropped the price difference between a 5star and 3 star air-conditioner from Rs 8,000 last year to Rs 4,000 this year.
“The pricing is much more attractive now for a five star energy efficient model. In fact, we expect 70% of our AC sales will come from 5 star models this year as compared to 20% last year,” he said. The company has this year launched 22 models of 5 star rating AC as compared to 14 models last year.
Babu said this will help the company to gain value leadership in the Indian market since this will pusup the average selling prices (ASPs) by 15%. LG is the country’s second largest air-conditioner maker trailing to Tata-owned Voltas.
The company is targeting 40% growth in AC sales this year as compared to 28% last year which would increase the business revenue from Rs 2700 crore to Rs 3500 crore.
LG is going to launch differentiated models for online this year across white goods, including air-conditioners and home appliances. “We have decided to have different portfolio management this year,” said Babu.
The company is only selling inverter air-conditioner models in the country whose contribution to total AC sales has gone up from 12% in 2016 to 32% in 2017, shooting up to 60% in 2018 with fall in prices. LG has also launched inverter models in window AC.
Babu said the the company had increased AC price by 2% during start of the calendar year and does not expect any further hike. The company had hikes AC prices twice last year whereby the price went up by 7-8%.
He said AC sales has already picked up in Tamil Nadu, Kerala and Andhra Pradesh. “The met department has given indication that average temperature this summer will go up,” Babu said.
source : internet