LG Electronics India has ruled out manufacturing notebook personal computers at its Ranjangaon plant in Pune.
"The market is too small for us to consider manufacturing notebook PCs in the country," said Moon B Shin, deputy managing director, LGEIL. The company currently imports notebook PCs from Korea for the Indian market.
It may be recalled that the company had said that it could manufacture notebook PCs at its Pune plant, earlier in the year. Terming the present duty structure unfavourable, R Manikandan, general manager - sales and marketing, IT products, LGEIL, said that the proposal may be revisited, depending on the 2006 budget proposals.
For notebook PCs, duty paid on import of components is almost equal to duties levied on the finished product, and as one moves to higher configurations, it costs more to import components than it would cost to import a finished product, said Vinnie Mehta, executive director, Manufacturers' Association for Information Technology.
LG currently has a 2 per cent market share in the Indian notebook PC market - a 3,20,000 unit-market which is expected to grow to 4,50,000 units next year. The IT business contributes about 20 per cent to LGEIL's revenues.
By bringing more monitors, optical drives, desktop PCs and notebook PCs in the market, the company expects the IT business to chip in 25 per cent of its revenues by 2006.
The growth drivers, Manikandan says, will be notebook PCs, desktop PCs and LCD monitors. Confident that LG will be able to make its mark in the notebook PC market in 2006, Manikandan says the focus would be on high-end products like Widescreen and Sonoma notebooks.
LG has done well in the IT category so far. It ranks third in the consumer desktop category in the country within less than a year of its entering the market and leads the PC monitor market (IDC PC monitor quarterly review for the second quarter of 2005). The company will start manufacturing optical storage devices at its Pune plant next year.
