Samsung, LG, POSCO Hold Collective Breath
By Kim Yoo-chul
Staff Reporter
Following the meltdown of Wall Street, major Korean exporters were busy doing impact-assessments, Tuesday.
Hyundai-Kia Automotive Group held an emergency meeting with most of its top officials attending as its business situation in North America is tough and the credit situation, "very volatile."
Samsung Electronics, the top liquid crystal display (LCD) TV set exporter to the United States, and second-biggest mobile phone provider LG Electronics instructed their U.S. operations to monitor how the fallout will affect their businesses there.
"For the time being, we are not considering lowering our sales target in the North American market. But our sales growth will be severely affected there, when the global economies dip into recession," a Samsung Electronics spokesman said.
According to industry sources, Samsung aimed at selling six million LCD TVs there this year amid a price war with Japan’s Sony. It also aims to sell over 40 million handsets there.
With the credit situation and housing bubble continuing to foster consumer unease, LG admitted that it could fail to meet this year's revenue target as consumers will tighten their purse strings and hesitate to buy brand-new consumer electronics gadgets and home appliances.
"Still, we are sticking to our sales target of $14 billion despite the meltdown. But the situation is bad," an LG spokesman said, adding his company has been reinforcing partnerships with premium distributors and is centralizing brand marketing activities, there.
In 2007, sales in North America represented about 23 percent of the company's total consolidated sales, LG said.
With a negative outlook for the nation’s leading consumer-related giants, steel giant POSCO officials said global steel demand will decrease, as the economic meltdown will hit investments in infrastructure.
"We don't see any direct and immediate impact on our business due to the collapse of Lehman considering the increased export portion to Asian emerging markets," a POSCO spokesman said.
Other business-to-business Korean exporters such as Doosan and SK say they are watching their stock movements as the result of instability of the U.S. financial markets.
"There is likely to be a domino effect as other firms who relied on Lehman will feel the effects of its meltdown," said Kil Ki-mo, a credit analyst at Goodmorning Shinhan Securities.