Driven by intense competition and as part of its global strategy to focus on more energy-efficient products, LG India is exiting the regular split air conditioner market, which accounts for almost 80% of the room air conditioner (RAC) market, to focus on the premium segment of inverter split air conditioners. The regular air conditioner market in the last three years has become highly competitive with more than 50 brands.
LG has drawn up an aggressive pricing strategy to bring the price of the inverter air conditioner below a five-star regular split air conditioner, and slightly higher than a three-star air conditioner. The industry expects this to lead to a price war in inverter air conditioners. LG has priced its 1.5 TR inverter split air conditioner at INR 35,000 (US$ 525) this year, compared to INR 46,000 (US$ 690) last year, and expects the price to fall further as volume gains.