LG Electronics Transfers Vehicle Lamp Business to Subsidiary ZKW... "Expecting Synergy Effects"

[Asia Economy Reporter Ki-min Lee] LG Electronics has transferred its entire vehicle lamp business, a business-to-business (B2B) operation, to its subsidiary ZKW.

According to LG Electronics and ZKW on the 28th, LG Electronics' VS (Vehicle Components Solutions) division has integrated the vehicle lamp business into ZKW. ZKW is an Austrian automotive lighting company acquired by LG Electronics in 2018. The lamp business transfer process was completed around mid-December after the establishment of ZKW's Korean branch in July last year.

Earlier, on the 23rd of this month, ZKW also announced in a press release that it would "integrate LG Electronics' rear lamp business and directly operate the small-scale lamp production plant in Ningbo, China, which was operated by LG Electronics' VS division."

An LG Electronics official explained, "LG Electronics mainly handled rear lamps, while ZKW had strengths in headlights," adding, "The lamp business was previously operated in two places, but to expect business synergy such as customer relationships, it is being transferred to ZKW."

LG Electronics' VS division will focus on infotainment, sensors, autonomous driving technologies, advanced driver assistance systems, electric vehicle-related products such as motors, and software, while ZKW, which has integrated the vehicle lamp business, is expected to accelerate its efforts to target the Asian market.

LG Electronics' automotive components business sales were KRW 3.3386 trillion in 2017, KRW 4.2876 trillion in 2018, and an estimated KRW 5.6004 trillion in 2019, but operating losses during the same period were KRW 106.9 billion, KRW 119.8 billion, and an estimated KRW 197.6 billion, respectively.