LG Electronics, one of Korea's largest home appliance makers, strives to become the global leader in 2007. The company said it aims to increase household appliance sales from U.S. $8.5 billion in 2004 to $14 billion in 2007 to pass competitors such as Whirlpool and Electrolux.
"We will shift our strategy from trying to boost production volume to expanding our foothold in the high end of the market with premier items," said LG president Lee Young-ha, in charge of the company's digital appliance division. He added that the new approach will help LG enhance its operating margin from last year's 5.1 percent to double-digits.
LG is reportedly the world's third-largest household appliance producer by annual turnover, trailing market leader Whirlpool of the U.S. and Sweden-based Electrolux. Whirlpool recorded $13.2 billion in sales in digital appliances in 2004, followed by Electrolux with $11.9 billion, and LG Electronics with $8.5 billion.
However, company-wide innovation led to a turnaround and sales from the division started to increase over the past few years from $5.6 billion in 2002 to $6.9 billion in 2003, and $8.5 billion in 2004.
LG is also one of the leaders in year-on-year growth rate at 22.6 percent compared to Whirlpool's 7.9 percent and Electrolux's 7.1 percent, although it stood at third place in 2004 in turnover. Operating profit margins of the three outfits were similar in 2004 at 5.7 percent for Whirlpool, 4.7 percent for Electrolux, and 5.1 percent for LG.
"We look to increase sales at about 20 percent every year to $10 billion this year, $12 billion next year, and $14 billion in 2007 while raising the operating margin to 10 percent," Mr. Young-ha said. (The Korea Times)
Back to Breaking News