LG Electronics India, which aims to graduate the rural customer from coolers to ACs,

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is aiming to double its rural AC sales to Rs 500 crore in the next two years, thereby contributing 20 per cent to its overall turnover, said Ajay Bajaj, business head - air conditioners, LG Electronics India, on Tuesday.

The company is betting big on its sub-Rs 10,000 AC in the rural markets, which competes with high-end coolers from companies such as Bajaj, Symphony and Kenstar. The consumer durables company, which has 65 AC models in its portfolio, is hopeful that ACs will soon replace air-coolers in rural markets.

“LG’s rural sales are less than 10 per cent for ACs now but by 2012 we expect this to become a competitive 20 per cent. Our rural AC turnover now stands at Rs 250 crore and we hope to double it in the next 18-24 months. Our rural offering is priced at Rs 9,990 and that helps to bridge the affordability gap. The purchasing power is slowly shifting towards rural markets and we want to grab the pie," said Bajaj during a press conference here.

LG sells window ACs in four capacities ranging from 0.75 ton to 2 tons priced between Rs 10,000-25,000. Other companies which offer window ACs near the sub-Rs 10,000 price point include the likes of Koryo, Godrej, etc.

According to industry officials, Voltas India was the first player in the AC market to offer consumers an air-conditioner in the Rs 10,000 price range about 5-6 years ago.

While the overall AC market is growing by 30-35 per cent annually, the rural market has the potential to grow much faster and deliver huge numbers in the coming days, said Bajaj. While the company is hoping that AC Solution Plazas (walk-in format) work to its favour in urban markets, LG believes that disposable incomes especially during harvest seasons and higher aspiration levels will do the trick in rural markets.

LG registered a turnover of Rs 1,600 crore in the AC segment last year and the company is targeting a turnover of Rs 2,500 crore this year with growth of more than 50 per cent compared to 2009. Bajaj said that LG is targeting a market share of 32 per cent with the launch of new models (100 per cent BEE star-rated) from the current market share of 29 per cent.

“With the economy looking up, we see major rebound in demand for consumer goods in the current year for which we have already upped our capacities,” said Yasho V Verma, chief operating officer, LG Electronics India.