LG Electronics has recalled the chief of its Indian operations in the first-ever mid-year change of management on the back of poor sales growth during his tenure and a slowing market. The country’s largest white goods maker will now be led by MY Kim, formerly global head of marketing for the $56-billion firm’s television and audio business.
The senior Korean, who is a close aide of the global CEO, replaces managing director Soon Kwon, during whose tenure LG India failed to weather the economic slowdown and lost out to ace rival Samsung in total sales, three senior industry executives said. There may be a of the senior leadership team at LG India as Kim is likely to reorganise the business, industry executives said.
The timing of the leadership change is significant considering that management reshuffles in Korean companies usually take place at the end of the calendar year and the fact that the white goods industry has again hit an air pocket in India, among the top five markets for LG globally, after reporting double-digit growth last year. LG India notched up sales growth of more than 15 per cent to Rs 18,500 crore in 2014 after three years of almost flat sales due to the economic slowdown during Kwon’s tenure. Kwon was MD of LG India since December 2010. According to the industry executives, LG wants the Indian operations to focus on its core business of home appliances and extend the lead over rivals, take the second spot in flat panel televisions and de-risk the core business by driving incremental revenue through smart phones
This strategy is also aimed at improving LG India’s profitability, which is another focus area, as the parent company bets on markets such as North America and India to improve its performance .An email sent to LG Electronics India on Saturday morning did not elicit any response till Sunday press time.
LG India is facing increased competition from rivals. In categories such as air-conditioners, Tata-owned Voltas has given a tough fight to LG. In flat panel TVs, LG is among top three led by Samsung and Sony. In smart phones, its market share was less than 5 per cent in the October-December quarter compared with Samsung’s 22 per cent, according to International Data Corporation.