LG Electronics India has said it has no plans to cut the price of its products following the announcement of 2 per cent cut in excise duty on consumer durables.
While talking to The Hindu , LG Electronics India Managing Director Soon Kwon said the business environment in the country would continue to remain uncertain in the short-term and he did not see a quick turnaround in the same.
“We all have seen turbulent time in the overall Indian economy. We have seen sharp rupee devaluation; it has influenced our manufacturing cost and also consumer price and consequently consumer’s disposable income. So it’s a severe impact,” he said commenting on the current situation. Asked if he sees improvement anytime soon, Mr. Kwon said, “Looking at overall situation today, quicker turnaround may not happen.
“It is a fundamental issue with business structure. If government can lead all this in a more constructive manner, to vitalise industries… in short term there are many uncertainties.”
Mr. Kwon answered in the negative when asked if the excise duty cut had generated some positive sentiment. “Not as of yet,” he said, adding that the company had “no plans to cut prices”.
However, the Korean major still remains bullish on the India market. The consumer durables major, which is still to come out with its 2013 revenue figures, is aiming for a turnover of Rs.22,000 crore from the country in 2014.
“In India, though the general sentiment has not picked up yet. There are still untapped markets, like the rural, hence opportunity is still there. We are putting resources into identifying those untapped India consumers.”
At present, India contributes between 4 per cent and 5 per cent in Korean major’s global business and is now among the top five markets for the company. Other top markets include, Korea, the U.S., Brazil and China.
“I would like to see overall Indian economy to come back to growth of last one-and-a-half decade. It has come down…we should be able to see revitalisation of Indian economy… that is must for us to grow better that other LG subsidiaries,” he added.
The company has planned an investment of Rs.800 crore this year in India on various activities, including marketing and research.
“We plan to invest Rs.800 crore this year. While Rs.300 crore would go into R&D and production, Rs.500 crore would be invested in marketing and branding during 2014,” Mr. Kwon said.
The company at its annual Tech Show held in the national capital recently showcased 230 new products, which will be launched for the Indian consumer gradually through the year.
