BEIJING, June 1 -- Lenovo Group Ltd, the world's third-largest personal-computer maker, said cost savings, not price cuts, are its priority as the company fends off competition in Asia from Dell Inc and Hewlett-Packard Co.

    "We don't want to be engaged in a price war," Yang Yuanqing, chairman of Lenovo, China's biggest PC seller, said in an interview in Beijing yesterday. "We will have further cost cuts to raise net profit margin this fiscal year."

    Lenovo is fighting to keep its lead in Asia as bigger rivals Dell Inc and Hewlett-Packard Co cut prices and increase production to sell more computers in the region, where rising economies are fueling demand. Personal-computer shipments in Asia increased 25 percent in the first quarter, outpacing the 13 percent gain globally, researcher Gartner Inc said in April.

    Lenovo's net profit margin was "more than 1 percent" in the fiscal year ended on March 31, Yang said. Profit this fiscal year "will be better" than the year before, he said, declining to provide numbers. Dell, the world's biggest computer maker, had a net profit margin of 6.39 percent in its last fiscal year.

    Lenovo will focus on differentiating itself from competitors by offering innovative products, Yang said.