In an effort to garner a larger share in the commercial Air Conditioner market in India, LG Electronics is pushing a twin strategy – focus on increasing localisation and enhancing maintenance business through a dedicated company.

The company is bullish on System Air Conditioning (SAC) Market comprising segments such as commercial, private, residential and public infrastructure. According to BRG data, size of SAC market in India was $530 million and is expected to reach $860 million by 2025 and $1,160 million by 2028. Factors, which will contribute to this growth would be economic progress along with an increase in population, post-Covid market recovery, estimated growth of real estate market at 25 per cent annually, government’s investment for social infrastructure and the policy of ‘Make in India.’

Keeping all these in mind, the Indian arm of the Korean major is to set up a dedicated company for maintenance business in May this year. Also, the company has started producing compressors for commercial AC in India and now the focus is on increasing localisation. “As of now, localisation level is around 50 per cent and effort would be to enhance it in phases,” said James Lee, head of the Air Solution Business Unit at LG Electronics Home Appliance & Air Solution Company during a presentation before global media here on Thursday.

In a statement, the company said that in India, where climate control is essential for maintaining comfort in diverse weather conditions, LG’s HVAC ((heating, ventilation, and air conditioning) solutions are particularly relevant. “The company’s focus on locally customized products ensures that Indian consumers benefit from the latest advancements in HVAC technology. LG’s energy-efficient solutions help reduce electricity consumption and contribute to environmental conservation, a crucial aspect in a country striving to balance development with sustainability,” the statement said.

Adding to this, Lee mentioned that there will be investment of work forces of sales office and R&D (Research & Development). There will also be an effort on cultivation of local HVAC expertise. Taking this forward, the statement said LG’s strategic approach includes expanding the entire value chain by investing in local infrastructure, ensuring cost and supply competitiveness through innovative manufacturing technology, and maintaining a robust global supply chain. Additionally, the company provides customized solutions and maintenance services, generating recurring revenue and enhancing customer satisfaction.

Talking about the global market, the company said that to further strengthen its position, it is pursuing strategic mergers and acquisitions, targeting locally competitive companies in key markets. This inorganic growth strategy allows the company to enhance its capabilities and expand its market presence, ensuring it remains a leader in the HVAC industry, it added.

Giving a picture of an overall strategy for the global market, the company assured revolutionizing the HVAC industry with its commitment to electrification, servitization, and digitalization. “LG is committed to leading the HVAC market with innovative, energy-efficient solutions that meet the unique needs of customers in every region. Our investment in local infrastructure, including R&D, distribution, and service networks, ensures that we provide tailored solutions that enhance comfort and sustainability,” Lee said while adding “We believe that our approach to HVAC will significantly contribute to a greener future while delivering superior performance and value to our customers.”

(The writer is in South Korea on the invitation of LG Electronics)

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