LG to cut costs

Worried over the overall slowdown, LG Electronics is on a cost-cutting drive in order to ensure that overall profits do not suffer.

According to Amitabh Tiwari, business group head - consumer electronics and kitchen appliances, “As of now we are sticking to the targets, plans and commitments. We will take a final call on whether we need to revisit our plans and on cost-cutting measures sometime in 2009.”

As of now, the company has slowed down remodeling of its 1600 retail outlets and has also stopped adding any more.

“Our thrust area right now is high-end products where value sales dominate more than volume. Sale of products like LCD televisions are growing at over 300 per cent. We expect the television segment itself to contribute close to Rs 3,000 crore this calendar year to LG’s overall turnover, which will be a growth of 17 per cent over last year,” Tiwari added.

LG Electronics will spend close to Rs 85 crore over September and October for marketing initiatives and promotional offers during the festive season. The company also expects to garner sales of close to Rs 1,100 crore during this period.

“The September-October months make up as much as 35 per cent of our turnover. We aim to sell close to 10 lakh CTVs during the festive month, and around 2 lakh in East,” informed Tiwari.

While the company has 26 per cent market share nationally, in East it enjoys a 30 per cent market share. The company sales volume is also growing at 14 per cent nationally while in East it is growing at 19 per cent.