LG Electronics will increase its production of home appliances for the first time in five years. The company suffered a reduction in production as it continued to cut production of low-cost products due to a price war with Chinese companies. But this year, the company is ramping up production as it enjoys strong sales across all of its product segments, including new home appliances and high-end organic light-emitting diode (OLED) TVs.
The H&A business division, which manufactures refrigerators, washing machines and air conditioners, and the HE business division responsible for the production of television sets recorded record plant operating rates during the first quarter of this year, according to LG Electronics’ first quarter report. The company’s air-conditioning plant ran at 136.7% in the first quarter, down from 112.5% in the same period last year, as sales already surged with this year’s hot summer forecast. The washing machine factory, which also produces clothes dryers and hairdressers, operated at 105.6% in the first quarter, compared to 85.2% a year ago, while the operating rate of the refrigerator factory fell from 96.1% to 113.9%. The TV factory ran at 102.1% in the first quarter, down from 92.3% a year ago, as sales of OLED TVs topped 4 million units.
The production volume of major consumer electronics products has also soared. LG Electronics’ H&A business division and HE business division rolled out a total of 15,204 units in the first quarter of 2019, recording the first increase in five years since 2014. LG Electronics’ home appliance production peaked at an average quarterly of 16,072 units in 2014 and had dropped to 13,854 units in 2015, 13,779 units in 2016, 13,663 units in 2017 and 13,276 units in 2018. price against competition from China. LG Electronics’ annual home appliance production capacity decreased by 28.7 percent, from 80,237 units in 2014 to 57,161 at the end of last year.
However, strong sales of its household appliances led the company to again increase its production volume. “In the case of washing machines, sales of new appliances such as clothes dryers and hairdressers have increased. Air conditioners have become a household appliance for all seasons,” an LG Electronics official said. “This year, we have increased the production volume of high-end TV models this year, as the demand for high-end TVs such as OLED TVs and nanocell TVs is on the rise.”