LG Elec aims to boost LCD TV sales despite downturn

Dr. Woo Paik, President and Chief Technology Officer of LG Electronics speaks at a news conference at the annual Consumer Electronics Show in Las Vegas, Nevada January 7, 2009.

SEOUL (Reuters) - LG Electronics is targeting a 50 percent increase in LCD TV sales to 18 million units this year, as it plans to step up small-sized TV sales to fight the current economic downturn.

LG, ranked No. 3 in liquid crystal display (LCD) TV market in January-September last year, is also aiming to boost its global LCD TV market share to 15 percent from 10.5 percent in 2008, said Simon Kang, chief executive of LG's home entertainment division.

Kang acknowledged that the targets were ambitious, saying: "We are seeking "stretched" goals this year."

In the plasma TV market, LG aims to sell 3 million to 3.5 million units this year, up from 2.8 million sold last year, Kang said. At 3 million, LG will have 19 percent of the plasma TV market.

Combined, LG aims to achieve a 16 percent market share in flat-screen TVs this year, hoping to become the world's No. 2 behind domestic rival Samsung Electronics.

Hit by the spreading global downturn, sales growth of pricy flat-screen TVs is likely to slow sharply in 2009. Research firm DisplaySearch forecast the LCD TV market in unit terms to grow 17 percent in 2009, slowing from a 29 percent increase in 2008.

Plasma TV growth is expected to suffer an even sharper slowdown, with total market size seen growing only 5 percent in 2009 compared with a 24 percent rise in 2008, DisplaySearch said.

"Uncertainties are mounting and we have set several scenarios ranging from the worst, the most likely to the best," Kang told reporters, when asked about the new year's outlook.

"But the way the first quarter is shaping doesn't look like it will be the worst."

While maintaining its focus on premium large-size TVs, Kang said LG would step up sales of smaller flat-screen sets targeting emerging market consumers who trade bulky cathode-ray tubes for LCD models and some developed market buyers for second TVs.

"We will seek volume growth in medium- and high-end models among the small TV category."

LG competes with bigger LCD brands Samsung and Sony Corp. In plasma TVs, it trails Panasonic and Samsung.

Samsung, the world's top TV maker, set its 2009 flat-screen TV sales goal at 26 million, including 22 million LCD TVs and 4 million plasma sets, Yonhap News reported on Thursday.

As plasma display panels (PDPs) are losing market share to the LCD technology, LG will remain flexible in plasma screen production and may cut output if necessary, Kang said.

"The mainstream is LCD," he said, adding PDP's last stand would be large-sized models where LCD prices still remain high.

Regarding market speculation that LG would eventually fold its plasma panel business, Kang said: "The PDP business will have to pass a around end-next year."

He did not elaborate on possible options. LG has already shut down one of its three PDP lines and decided to set up solar cell production lines at the former PDP plant.

LG posted 1.5-2 percent operating profit margin on its TV business last year, he said, adding the company would try to maintain the margin this year.

Kang's remarks, made at a news conference earlier this week, were embargoed until Friday Seoul time for the Consumer Electronics Show event.

Kang, who previously headed LG's display business, was promoted in December to lead the newly created home entertainment unit that covers display, television and digital media products for consumers.

Those businesses accounted for about 35 percent of LG's total revenue last year, according to LG.

LG shares were up 0.97 percent at 83,300 won in Seoul at 0009 GMT, in line with the wider market's 0.95 percent gain.

(Editing by Keiron Henderson)