SEOUL--LG Electronics Inc said it aimed to raise its liquid crystal display (LCD) TV sales by 50 percent this year, in what analysts say is an ambitious plan to take on Japanese rivals in the unstable flat-screen TV market.
With Japanese electronics makers hit by weak consumer demand and a stronger yen, Korean firms are seen better positioned to wrestle market share, selling products cheaply helped by a soft Korean won but at the cost of their profit margin.
LG, ranked No. 3 in the LCD TV market in January to September last year, aims to sell 18 million sets this year to boost its LCD TV market share to 15 percent from 10.5 percent in 2008, said Simon Kang, chief executive of LG's home entertainment division.
LG competes with bigger LCD brands Samsung Electronics Co Ltd. and Sony Corp.
Samsung, the world's top LCD TV maker, said on Thursday it was targeting a 10 percent growth in LCD TV sales to 22 million, Yonhap News reported.
Analysts were sceptical of LG's targets.
"LG's target is unrealistic under current market conditions. U.S. consumers are buying digital signal converters (for their analogue televisions) instead of new TVs, even with huge discounts," Park Sang-hyun, an analyst at HI Investment & Securities.
"The reason LG is setting such an ambitious goal is probably because it wants to outrun Japanese rivals when companies like Sony are reeling under the higher yen."
Sony, which initiated a costly price war on flat-screen televisions last year, is unlikely to continue aggressive price cuts because of the strong yen, analysts said.
LG's Kang acknowledged its targets were ambitious, saying: "We are seeking "stretched" goals 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.
LG shares lost 1.9 percent in Seoul by 0340 GMT in a broader market down 1.2 percent.
LG posted 1.5-2 percent operating profit margin on its TV business last year, Kang said, adding the company would try to maintain the margin this year.
In plasma TVs, where LG trails Panasonic Corp and Samsung, it 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.
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.
Commenting on market speculation that LG would eventually fold its plasma panel business, Kang said: "The PDP business will have to pass a [hurdle] around end-next year."
