Korean consumer durable companies chalk out ambitious India plans
By Venkatachari Jagannathan | 20 Feb 2006
Chennai: The three Korean consumer durables manufacturers — LG Electronics India Private Limited, Samsung India Electronics Private Limited and Hyundai Electronics India Limited — have chalked out ambitious India plans. While the first two companies dominate the market now, Hyundai Electronics is a relatively small player in India.
After establishing its market leadership in the home appliances segment (colour televisions, washing machines, air conditioners etc) the Rs7,500-crore turnover LG Electronics is giving a major thrust to push its mobile handsets. It may be recalled that the company has set up a 1-million unit plant in Pune.
According to Kwang Ro Kim, managing director, the company will increase the mobile handsets production this year. Last year the company sold four lakh CDMA and 12 lakh GSMhand sets. "The target for this year is 30 lakh CDMA and 50 lakh GSM units."
LG Electronics India recently launched four new GSM phones (three in the high end and one mid-segment category) in Chennai and in the process beefed up its product portfolio to 14 models. During 2006 the company intends to grow the GSM handsets business by 300 per cent and contribute Rs600 crore to the targeted turnover of Rs9,000 crore.
The company wants to move up the market-share ladder from the fifth to the third spot in the mobile handset market. Towards this end, LG Electronics will add another 18 new handset models to its portfolio and also increase the mobile handset dealer network by 9,000 to 20,000 dealers. By the 2010, the company hopes to produce around 10 million mobile phones in India for the domestic and export markets.
"Around 5,000 GSM phones per month are exported. We ship our phones to countries like Sri Lanka, Bangladesh, Kenya and others," said Kim.
Similarly, Samsung India has announced an investment of $15 million to set up a 1-million mobile phone manufacturing facility near the India's capital New Delhi also plans to jack up the capacity to 20 million by 2010.
The company has identified air conditioners as the growth driver and launched 19 new models across all the categories — window, split, tower, ductibles and cassette and entered with a bang both the commercial and the residential markets. The company's air conditioner product portfolio ranges from 0.8 tonne to 2.0 tonne.
According to Samsung India's deputy managing director, Ravinder Zutshi, the company's renewed focus on the air conditioner segment is due to the newly set up 4 million units per annum heat exchanger plant that went on stream last November.
The domestic air conditioner market is estimated to be around 12-lakh units per year and Samsung India is targeting 28 per cent of it. The company will be testing the market for commercial air conditioners by importing the product initially.
Investing around $135 million in India, Samsung India generates 1.8 per cent of the annual turnover of the South Korean parent Samsung Electronics' $55.2 billion. The Indian company also has an export revenue of Rs100 crore from the export of refrigerators, televisions, washing machines and colour monitors to the Middle East and the SAARC countries.
Even Hyundai Electronics has plans to grow its consumer durables business in India. At present a major portion of the company's sales is contributed by its flat screen televisions and the company is likely to increase its product portfolio this year adding microwave ovens, frost-free refrigerators among other white goods.
All the three Korean companies have been experiencing increased sales of their flat screen colour TV ssets. While the colour television category is logging slow growth, the flat screen models are moving fast. Says Kim, "Sixty per cent of the television buyers opt for flat screen models and our production will be in tune with the market demand."
LG Electronics will be increasing the colour television production by 20 per cent over last year's figure of four million units. In the refrigerator segment, the company is focusing on the premium segment. The company recently launched a three door 751 litre DIOS model priced Rs1.30 lakh. During 2005 the company sold 800 units of the two-door DIOS.
LG Electronics and Samsung India are also exporters of TVs, washing machines, air conditioners, colour monitors, from India. Last year LG Electronics and Samsung India exported goods worth $140 million and $22 million respectively. Hyundai Electronics has announced its plan to set up a plant in Uttranchal at an outlay of Rs100 crore with an idea of supplying to SAARC countries.
