LG targets W5 tril. in air conditioner sales

Nho Hwan-yong, second from left, president of LG Electronics’ air-conditioning division, and the company’s marketing chief Choi Sang-kyu, third from left, stand next to its new air conditioners during a launch event in downtown Seoul, Tuesday. / Courtesy of LG Electronics

By Kim Yoo-chul

LG Electronics plans to generate at least 5 trillion won in annual revenue from its air-conditioner business this year as the firm expects a mild recovery in real estate markets to boost the demand for both commercial and household air conditioners.

“LG’s air-conditioner division, excluding components, reported 4.6 trillion won in revenue last year. This year, we are aiming to grow revenue by double-digits,” Nho Hwan-yong, president of the company’s air-conditioning division, told reporters during a news conference in downtown Seoul, Tuesday.

The executive admitted that the sales curve for its commercial air-conditioners to be used in offices and buildings remained stagnant.

However, the company plans to soothe concerns over the worsening profitability of that division by focusing more on export markets, including the Middle East, China and South America.

“In air conditioners for households, LG is in good shape. But in commercial ones, LG was late for the profitable market. We are tapping the Middle East region as there are many plants, meaning that demand for commercial air-conditioners looks strong,” said the company executive.

While it is putting more resources on commercial units, LG is also broadening its business territories to China, Europe and the United States to achieve this year’s growth target, Nho said.

Unlike smartphones and televisions, LG has been consistent in raising awareness in home appliances, including air-conditioners and refrigerators, as LG Electronics has a long history and proven track record in those segments.

During the conference, LG released brand-new models. The upgraded Whisen-branded air conditioners are featured with improved hardware specifications, enhanced energy efficiency and a sleek surface design.

About its pricing policy, Oh Jung-won, an executive at the firm, said it will launch aggressive promotional campaigns to entice more customers.

LG said in a statement that the price ranges of its latest air conditioners are between two million won and three million won in a strategy to spur a replacement cycle.

Appliances have late replacement cycles, while consumers usually change mobile devices every three years.

Amid the industry’s new trend for connectivity, LG said it’s been in talks with Naver and Kakao to put the former’s Line and the latter’s Kakao messaging services on its newly developed home-chat functions.

“Line and Kakao services will be available in more than 10 models from April and May, respectively,” said Lee Kam-kyu, senior executive at LG’s air-conditioning division.