Brakes on free fall in LCD, plasma prices

KOLKATA: Consumer electronics majors LG, Samsung, Haier and Videocon expect prices for LCDs/plasma TVs to fall by only 15% in calendar 2007 compared to the 35-40% levels witnessed during the past three years. They will restrict price cuts to maintain margins since consumer demand isn’t as bullish as expected.

Interestingly, the players are also drawing up plans to assemble LCDs in India to improve bottomline and enhance inventory control. The electronics industry had pegged to sell some four lakh LCDs/plasma TVs in 2007, but the players feel the slower offtake will lower sales to less than three lakh units.

LG Electronics India’s national head (consumer electronics) Amitabh Tiwari confirmed that the recent trend of plunging LCD TV prices had been partly contained. “There’s been marginal price erosion in February and the next price dip isn’t likely before Diwali. The companies are also investing heavily in ad campaigns to push sales,” he said.

For instance, LG’s started commercial assembling of LCD/plasma TVs in India on a soft scale which will hit the markets by June. “Assembling in India will lower costs by about 2% compared with South Korea. But the biggest advantage is proper inventory control since shipments take about 35-40 days,” said Mr Tiwari.

Elaborating, Haier India’s chief operating officer & director Pranay Dhabhai said local assembling in India will ensure better contribution to bottomline. Haier is exploring contract manufacturing options in India.

“Since shipment takes time, it often happens that by the time inventory reaches India the global prices for LCD/plasma TV has fallen. As a result, we take a hit. Local production will provide the price advantage,” Mr Dhabhai said.

While Videocon intends to assemble LCD/plasma TV in their Kolkata facility, Samsung is sprucing up its capacity in India as well.