By Marie-France Han and Rhee So-eui
SEOUL (Reuters) - LG Electronics Inc is aiming to post sales this year equal or higher than 2008 in its home appliance unit, despite expectations that the global appliance market will shrink by 19 to 20 percent, an executive said on Thursday.
LG (066570.KS: Quote, Profile, Research, Stock Buzz), which competes with Whirlpool Corp (WHR.N: Quote, Profile, Research, Stock Buzz) of the United States and Electrolux (ELUXb.ST: Quote, Profile, Research, Stock Buzz) of Sweden, expects growth in the global appliance market to return to its pre-slowdown rate in 2010 or 2011, said Dan D.H. Koh, vice president in charge of marketing strategy at LG's home appliance unit.
Koh said LG was also aiming to resume its pre-downturn annual growth rate of around 19 percent in home appliances as early as in 2011.
"In the past, we had been looking to grow our volumes, but we are now focusing on increasing our market share," Koh told the Reuters Global Technology Summit in Seoul.
LG, which is also the world's biggest maker of residential air conditioners and No. 3 maker of mobile phones, is striving to establish itself in the health product segment of the appliance category by selling items such as massage chairs.
"We are planning to maintain or even expand our strategic investments such as R&D and marketing," Koh said, without elaborating on the amount of investment.
TOP BRAND
LG entered the North American front-loading washing machine market in 2003 and has been the top brand in that market for nine straight quarters.
"This is a very difficult, and very interesting business," Koh said, adding that the industry was fragmented across dozens of brands, with local brands dominating local markets. "For LG to enter new markets and compete with those local brands under its own name is not an easy thing."
LG, which is also the No. 1 brand in refrigerators worldwide, is aiming to focus on large cooking appliances, chief among them ovens.
"We are already the world's top brand in microwaves ... and we think large cooking appliances such as large ovens are a segment we must enter," Koh said.
The executive said ovens represented a particularly important product segment as surveys show they play a key role in determining consumers' other kitchen appliance purchases.
"People buy ovens, then decide to choose their dishwashers depending on the oven's brand and design. Ovens are the center of the kitchen."
LG has so far avoided price cuts and considers this policy key to its success, but it intends to respond more actively to competitors' price rebates by offering promotions on older models.
"We intend to meet the needs of those consumers that are more sensitive to prices," Koh said, "but even then we intend to keep a price premium." Continued...
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