A boom in air-conditioners sales has prompted LG Electronics to revise its sales target upwards for the current year to 1.8 lakh units from 1.5 lakh units. The company plans to set up a new multi-product manufacturing facility in the southern India. The company is likely to choose between Karnataka and Andhra Pradesh to set up the plant .
LG sold one lakh air-conditioners in the whole of last year. The company expects that air-conditioner sales is likely to contribute around Rs 525 crore, up from Rs 315 crore last year.
LG reported a 98 per cent growth in air-conditioners selling 45,000 units in the first quarter of the current year. Several smaller cities such as Coimbatore, Thiruvanthapuram have triggered the sales spurt. According to company sources 63 per cent of the air-conditioner market lies in 70 cities and there is tremendous opportunities to develop the market.
Last year, the company slashed prices by almost Rs 1,500 per unit to trigger volume pick-up in the sluggish market conditions. However, the company is "comfortable" with operating margins under the `softened price regime'''' and is not likely to effect a price hike even as volume soars.
Source: Business Line