LG Starts Making Phones Here, Plans Country-Specific Models
Optiemus Group firm begins trial production for South Korean co
Kolkata: LG Electronics has started manufacturing smartphones in India, and will for the first time, launch India-specific models in its quest to get back to the highgrowth trajectory in the country. The South Korean parent company has already inked an agreement with GDN Enterprises, a part of New Delhi-based Optiemus Group, for manufacturing and has started trial production with two models. The lines have been imported from South Korea and will be expanded to include more models, three senior industry executives said.
Optiemus currently manufactures for HTC and Oppo and has inked a joint venture with Taiwan’s leading contract manufacturer Wistron for setting up a new plant, which will eventually undertake production for these smartphone brands.
Local manufacturing will give a price edge to LG since the duties and taxes will come down by more than 10%, the executives said. LG India managing director Ki Wan Kim said while the company has been evaluating the feasibility of making smartphones in India, there has been no concrete development yet. Optiemus Group managing director Ravinder Zutshi, too, declined to comment. But LG’s Kim said the company will launch 6-7 models which are customised for India to revive the smartphone business. “The business has been a poor performer due to poor product portfolio. We will revamp the portfolio from this month. Our products are superior to competition which we will focus through experiential marketing,” he said.
LG’s growth rate in India had been impacted in last few years due to poor consumer sentiments impacting sales of white goods. In 2014-15, the company grew by 12% after three years of no growth. Results for last year are yet to be declared.
While LG has for long been a leader in refrigerators, washing machines and microwave ovens, it has branched into flat panel televisions to overcome its dependence on the home appliances segment. Since last December LG overtook Sony to second spot in the Indian flat panel television market, where the market leader is Samsung.
Now it wants to rebuild the smartphone business where it had failed to gain share and become a significant player despite several attempts. Kim said he would revamp marketing efforts in India since the products are technologically superior as compared to competition, which is not communicated clearly. “We will pursue to make LG a premium brand in India. The effort is to develop products based on consumer insights. While for existing categories we will focus on energy efficient products, we are also evaluating air and water purifiers as next growth areas,” he said.
Co sees smartphones as a route to growth in a stagnant appliance market