LG Electronics, a pioneer and leader in home appliance convergence, aims to become the leading home appliance maker in the world by 2007.
In order to increase global sales to US$14 billion by 2007, LG is focusing its production and marketing efforts on high-end products to target the premium appliance market. This will help the company overtake competitors such as Whirlpool of the USA and Sweden-based Electrolux. In the Middle East, LG is aiming for overall regional sales of US$2.8 billion this year, a 34 per cent growth over 2004.
“LG is already the world’s top selling brand in terms of air conditioners, microwave ovens and canister vacuum cleaners. We want to expand that portfolio to include large air conditioning systems, drum type washing machines and side-by-side refrigerators. We are aiming for combined sales of US $42 million in refrigerators in Oman, Qatar, Bahrain and Kuwait. Currently, LG is the market leader in these markets with 20 percent market share in terms of units sold and 23 percent in sales turnover. We enjoy a healthy 30 percent market share in the side-by-side refrigerator category in the region,” said K H Kim, President, LG Electronics Middle East and Africa Operations.
Since 1999, LG’s Digital Appliance Company has been posting over 20 per cent growth in sales every year compared to the four to five percent average growth rate in the global home appliances industry. LG has designated Plasma Lighting System (PLS) as the company’s future product of focus.
PLS technology, commercialised for the first time in the world by LG, is a lighting system that uses magnetrons and microwaves inside a small bulb to generate visible light. This new initiative was aided by the company’s core competency in magnetron technology, the technology LG developed for its microwave ovens. According to LG, this light is closest to sunlight and uses only 80 per cent of the electricity consumed by traditional light bulbs. LG believes this next generation technology can replace the traditional lighting systems used at sports stadiums and in streetlamps.
Other product innovations include the three door side-by-side refrigerator with the world’s first liquid crystal display monitor. LG invested US$6 million over the past three years to develop this new refrigerator model; the Steam TROMM washing machine that sprays steam on laundry using a dual spray system for a cleaner wash; and the Roboking II, an automated robotic vacuum cleaner with motors for maximum suction power, infrared gyro sensors, and a long lasting lithium polymer battery.
“LG is a technology-driven company which, for example, has developed a new direct drive system for washing machines – a technology that dampens vibrations, reduces noise and, in particular, cuts energy consumption. We are now well positioned and on our way to becoming the number one name in the market. We have come a long way in terms of growth but now is the time to take the next step and showcase our technological superiority and commitment to innovation and premium quality products,” added Kim.
Recent media and industry reports have also commended LG’s production bases in China, India, Mexico and Eastern Europe and its R & D investment levels, compared to competitors. LG recently held a ground breaking ceremony for its ‘digital convergence R&D Center’ in Seoul to lead the company’s initiatives on convergence and development of premium appliances. Young-Ha Lee, the President and CEO of LG’s Digital Appliance Company said the company plans to raise the ratio of overseas production to the 40-50 per cent level by 2007 from the current 25 per cent.
