By Kim Yoo-chul
The head of LG Electronics’ TV business unit said Thursday that Chinese TV firms are emerging as the biggest threat to the Korean electronics giant as they are churning out more affordable models.
``The China risk is posing the biggest threat to us. LG isn’t too worried about Japanese rivals. However, we should admit that Chinese TV makers are challenging us,’’ said Kwon Hee-won, the president of LG’s home entertainment unit, in a news conference at its main research center in Seoul.
``Unlike Japanese companies, Chinese TV producers have in-house module plants, helping them mass-produce panels for televisions,’’ the executive told reporters.
Kwon said the market for next-generation televisions such as OLED sets is booming as Korean, Japanese and Chinese companies are entering the fray for such advanced TVs to find new cash generators.
LG, the world’s No. 2 TV maker is working on to release a curved organic light-emitting diode (OLED) TV in the latter half of this year as it still needs to solve some technical problems before mass-production.
``By commercializing modified models that literally copied the look and feel of products by Korean companies, Chinese rivals are expanding their presence. But in terms of hardware technology, China lags behind by at least three or four years,’’ stressed Kwon, who is regarded as the right-hand man of LG Electronics CEO Koo Bon-joon.
In order to soothe such market uncertainties, LG plans to up its TV sales by 15 percent by offering sets with new displays and more advanced functions and Kwon explained this year’s sales projection is ``rather bullish’’ considering the stalled growth in overall TV demand.
In a separate meeting with The Korea Times, Cho Taeg-il, the vice president of LG’s home entertainment preceding product planning group, spoke on the firm’s targets to sell as many as 36 million flat-screen TVs.
``As you know, LG Electronics has completely stopped producing bulky cathode ray-tube (CRT) TVs and the situation is the same for Samsung Electronics. Demand for plasma televisions will further decline, while we are confident to sell more flat TVs using light-emitting diodes (LED) as the backlight,’’ Cho said.
Asked if there has been any impact from the weakening yen, Kwon said: ``Yes, Japanese TV makers are preparing a comeback helped by the weakening yen, making their products price competitive in several key markets. But we don’t see any big negative impact on us. LG Electronics, however, has been closely monitoring the currency move.”
``When you talk about only our TV business, LG is paying 14 percent as a tariff in Europe, while the rate in the United States is 5 percent, meaning we have already implemented localized strategies according to the country,’’ he stressed.
LG plans to focus more on higher-margin TVs using new display technologies including ultra-high definition screens and OLED sets, to combat slowing profitability in the industry as consumers shift toward portable devices.
In a press statement, LG said pre-orders for LG’s OLED models have reached 100 so far and a 55-inch set costs 11 million won.
It released an upgraded version of an Internet-enabled TV with three dimensional (3D) capability in Korea today.