LG to launch more ACs

LG Electronics India Ltd, market leader in the air conditioner (AC) segment, has lined up a slew of launches for next year, including the first 0.5 tonne and 2.5 tonne ACs in the country, according to Ajay Bajaj, product group head, ACs, LG.

LG will launch the country's first 0.5 tonne AC in January, which will be priced at Rs 7,500, making it the cheapest branded AC in the country. Then there is the 2.5 tonne AC, the first one with this capacity in the country.

Till now, high wall split ACs exist upto 2 tonne capacity. The company will also bring out its Neo Plasma ACs in January, based on a technology which kills viruses. These ACs will be priced around Rs 2,000 higher than the ACs with the same capacities.

LG will also launch ACs with inverter technology that would be imported from Korea. Available in two capacity- 1.5 and 2 tonne, the ACs will cost 70 per cent higher but will use 40 per cent less power.

The company will increase the number of split AC models from 16 now to 26 next year and window AC models from 32 at present to 40 next year, Bajaj said.

LG will spend $30 million next year on research and development, making new moulds for its new models and upgrading its labs. It manufactures ACs at its Greater Noida plant in Uttar Pradesh.

A retail expansion is also on the cards. Currently, LG has 1,500 billing points (distributors/ dealers) and more than 3,000 sales points. It will increase its billing points by 20-25 per cent in the next one year. The number of its premium Whisen AC outlets will go up from 12 to 20 by 2005 end and to 50 by end 2006.

It will also expand its round-the-clock after-sales service network, currently present in the metros, to 50 more cities by next year. Marketing spends will go up from Rs 40 crore this year to Rs 50 crore next year.

LG's air conditioner division will close the year with revenues of Rs 950-1,000 crore from its room AC business (window and split ACs) and Rs 120-125 crore from commercial ACs. It is targeting revenues of Rs 1,300 crore from the room AC business and Rs 200 crore from the commercial AC business next year.

The air conditioner division contributes 15 per cent to the company's revenues.