"Many customers are looking for two-story homes or 40-pyeong units. The response has been better than expected, prompting us to accelerate our product development plans," said Jo Yeon-woo, CEO of LG Electronics' Smart Cottage Company, in an interview on November 10.
LG Electronics has expanded its 'Smart Cottage' housing modules, which are assembled on-site, to include 22 and 24 pyeong sizes. These homes combine appliances and HVAC technology with artificial intelligence (AI) and energy management features. Interest has surged from developers looking to create residential complexes, moving beyond corporate training centers and lodging facilities. The company is broadening its market from small second homes to permanent residences and larger developments. Jo emphasized, "While there are many competitors in home construction, we are confident in our ability to manage homes effectively."
- Why are you expanding to larger unit sizes?
"Interest is so high that our showroom in Jincheon, North Chungcheong Province, is fully booked. When meeting actual customers, many expressed a desire for two-story homes or 40-pyeong units. Initially, many customers were unfamiliar with single-family homes, but they showed interest in being able to check product configurations and prices on our website. Our goal is to launch 30 and 40-pyeong models next year, but we need to ensure we have sufficient materials, supply chain management, and quality in place before we can do so."
- What is the current business performance and corporate demand?
"While I can't disclose specific supply or contract figures, we have seen about tenfold growth compared to last year. Opportunities for business-to-business (B2B) and business-to-government (B2G) transactions are rapidly increasing. Developers looking to sell residential complexes have also been reaching out, and we are discussing zero-energy housing complexes of 20 to 30 units, including in Jeju Island. We are receiving inquiries from the U.S., Europe, and Australia as well. Individual customers are typically looking for second homes or residences for their parents, while businesses appreciate the ability to install consistent quality accommodations wherever they desire."
- How does the cost competitiveness compare to traditional single-family homes?
"As the unit sizes increase, the price per pyeong has dropped below 10 million won. However, total costs vary depending on the land. A 22-pyeong home requires three modules, and costs can differ based on transportation distance and conditions. For instance, shipping to Jeju can be 20 to 30 percent more expensive. It’s crucial to minimize unexpected costs rather than just lowering prices. We conduct on-site assessments to estimate installation feasibility and costs in advance. Just because a customer has secured land doesn’t mean they can immediately place a home; we must first check site conditions to avoid unnecessary construction and expenses."
- Are modular homes as safe and comfortable as traditional homes?
"If built correctly, they can be. We must adhere to legal standards regarding electrical safety, structure, seismic resistance, and insulation performance. We cannot construct homes that do not meet LG Electronics' quality standards. Some models have even received the highest certification for zero-energy buildings, ZEB Plus. It’s essential to ensure quality as a home rather than just focusing on cost."
- How do AI and energy management features change daily living?
"Our goal is for customers to use AI without being aware of it. When they approach their home, heating can be turned on in advance, and with the push of a button, lighting and curtains can be set to their desired state. For the 22-pyeong model, customers can also choose a 5 kW solar power system. In the future, we plan to develop systems that prevent freezing or overheating while maintaining low power consumption when the home is unoccupied. The shape of the house is also important; overly complex exterior walls can increase heat loss due to greater exposure. We need to consider not only appliance efficiency but also housing design and the residents' lifestyles."
- Does LG Electronics face disadvantages compared to competitors with smartphones?
"While that may be true when looking solely at smartphones, we are sufficiently compensating for platform scalability through collaborations, such as with Apple. A home cannot be completed with advanced technology alone; we need to assess the land and connect utilities for people to live there. The process of construction must also become smarter, allowing customers to monitor the construction process and manage contractors. Changes in robotics and personal devices will create new opportunities as well."
- Have you encountered unexpected requests from customers?
"Some customers insisted that a newly released LG robot vacuum be included for them to sign a contract for the home. While it could be purchased separately, I wondered why they felt that way. Later, I realized they were expecting 'completeness.' They believe that if LG Electronics builds the home, it will come fully equipped with appliances and functions. We want to reduce the hassle of determining whether a leak is due to a refrigerator issue or a building problem. We are more confident in managing homes than in just building them."
- Will Smart Cottages eventually be integrated into apartments?
"I believe that is the direction we should take. However, we currently do not have specific plans to supply Smart Cottages to apartments. LG Electronics has already developed technology to control apartment facilities through its ThinQ platform. We can expand our management scope beyond appliances and lighting to encompass the entire living space. We are also interested in precast concrete (PC) methods for producing concrete components in factories. Business judgment and securing partners are crucial. We should not view homes solely as single-family units but as a collection of technologies and services applicable to various living spaces."
- Is it possible to relocate a home to another location for reuse?
"Technically, it is possible due to the steel frame modules. However, this does not mean they can be moved indefinitely. The issue lies in regulations. In South Korea, homes are considered immovable real estate. To relocate an existing home, one must go through procedures such as demolition reporting. Just as the functionality of cars has changed, I believe the utilization of homes can also evolve."
- What regulatory barriers hinder business expansion?
"Entering public procurement is challenging. Local government officials may show interest, but when they inquire about registration with the procurement office, it often stalls. There is also a need to clarify the classification of mobile and modular homes. It is difficult to take advantage of the VAT exemption for construction services of national housing scale. Additionally, support for energy facilities like solar power and heat pumps is fragmented across different ministries and regions. It would be beneficial to consolidate these efforts."
- What should homes for future generations look like?
"Our team aims for 'healthy homes.' A home is where people spend the most time. High levels of carbon dioxide can affect children's concentration. However, it’s not feasible to keep windows open while studying in winter. Properly utilizing heat recovery ventilators installed in apartments can help manage indoor air quality. Such small differences can be crucial for children's futures. We want to create homes where children can live in a healthy environment without worrying about technology. Our mission is to build healthy homes."
* This article has been translated by AI.
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