Apple-Magma-LG Electronics, Demonstrating 'Synergy' in the Electric Vehicle Triangle Relationship

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[Asia Economy Reporter Kum Boryeong] An analysis has emerged that the cooperation news between LG Electronics and 'Magna' is creating synergy with the Apple Car news.

On the 25th, Korea Investment & Securities suggested an 'increase in weight' for the automotive industry. This is because the electric vehicle triangular relationship connecting Apple, Magna, and LG Electronics is generating synergy.

LG Electronics announced on the 23rd that it will collaborate with Magna International, the world's third-largest parts manufacturer, on the electric vehicle parts business. According to the Financial Supervisory Service's electronic disclosure system (DART), LG Electronics will spin off the motor, inverter, and related businesses within the electric vehicle parts division through a simple and physical split. The newly established company will be tentatively named 'LG Magna e-Powertrain' and plans to form a joint venture with Magna.

Jinwoo Kim, a researcher at Korea Investment & Securities, explained, "Magna has expertise in complete vehicle assembly and contract manufacturing. It already undertakes contract manufacturing for several European automakers such as BMW, Jaguar, and Mercedes-Benz." He added, "There is speculation that Apple might entrust Magna with the production of the Apple Car. Apple and LG Electronics already have a business relationship. Considering the relationships among Magna, Apple, and LG Electronics, it is possible that LG Magna could supply parts for the Apple Car." According to foreign media and industry sources, Apple is reportedly aiming to launch its own autonomous vehicle in 2024.

There are three implications in the context of increasing new players in the automotive industry. First is the renewed attention to the automotive industry. Researcher Kim said, "Apple's potential entry should not be viewed solely as a threat but rather as an indication of the high growth potential of the automotive industry." He added, "The automotive industry, evolving into mobility and future cars, is expected to penetrate daily life more closely than before. From the perspective of a consumer goods company like Apple, excluding automobiles is difficult."

The renewed focus on automotive manufacturing technology and core components is also indispensable. As more companies enter the automotive industry, the value of manufacturing technologies, which were previously regarded as outdated, is rising. This includes not only final assembly but also key processes such as hot stamping. Researcher Kim analyzed, "As the number of new customers increases, the bargaining power of companies holding core components will rise again, and their sales growth potential will also increase."