LG Focuses on Localizing Commercial ACs in India, Launches Separate Service Company

LG Electronics is making a big push into the commercial air-conditioner market in India. The company has set up a new Indian company to handle the service and maintenance of these ACs, according to James Lee, head of LG’s air solution business unit.

LG has started producing compressors for these ACs in India, achieving about 50% localization. The company plans to increase this percentage gradually, supported by Indian government initiatives. However, some components will still need to be sourced from Korea.

Lee mentioned that LG encourages its factories worldwide to supply other markets, and there is potential to export made-in-India commercial air-conditioners to the United States or Africa.

The new service company in India is part of LG’s global strategy, with similar setups in about ten other countries. This entity will generate revenue through services and maintenance.

LG aims to lead in electrification, servitization, and digitalization, using advanced inverter and heat pump technologies to offer new products for the commercial sector. In the residential AC market, LG competes with brands like Voltas, Daikin, and Lloyd. The commercial AC market in India was worth $530 million in 2022 and is expected to grow to $1.16 billion by 2028. LG’s main competitors in this segment include Blue Star, Voltas, and various Japanese and Chinese brands.

The growth of the real estate market, foreign investment, and government spending on social infrastructure will drive the commercial AC market in India. LG has also established six HVAC training academies in Noida, Pune, Bengaluru, Mumbai, Chennai, and Kolkata to train workers.

This focus on the commercial AC business in India is part of LG’s global plan to transform from a consumer electronics company to a smart life solutions provider by 2030.