LG Electronics Strengthens Automotive Division... Secures New Growth Engine

LG Chairman Koo Kwang-mo is visiting the LG Electronics Design Management Center and examining the clothing care device installed inside the future-oriented connected car.

[Asia Economy Reporter Dongwoo Lee] LG Electronics is strengthening its automotive components business for the next-generation electric vehicle era.

According to industry sources on the 2nd, LG Electronics is establishing a joint venture called 'LG Magna e-Powertrain' (tentative name) with Magna International, the world's third-largest automotive parts supplier based in Canada. The joint venture will manufacture electric vehicle motors, electric vehicle inverters, and electric driving systems in Incheon and Nanjing, China.

The plan is to maximize synergy by combining Magna's global customer network, integrated system design engineering capabilities in the powertrain sector, and LG Electronics' technological expertise in core electric vehicle powertrain components.

LG Electronics explained that the joint venture can expect new orders not only from Magna but also from Magna's customers, enabling early mass production and achieving economies of scale.

Some in the industry suggest that Apple is in talks with Magna for next-generation electric vehicle production, and LG could expand its customer base to next-generation mobility manufacturers like Apple through this partnership.

To strengthen its automotive components business, LG Electronics transferred its vehicle lamp business within the VS Business Division to ZKW in 2019 for integration. Previously, after establishing the VS Business Division in 2013, LG acquired ZKW, an Austrian premium vehicle headlamp company, in 2018.

The company plans to launch the joint venture this year and promote its automotive parts business centered on three pillars: the VS Business Division (infotainment), ZKW (lamps), and LG Magna e-Powertrain (powertrain).

The securities industry also expects LG Electronics' automotive components business to turn profitable in the third quarter of this year. It is anticipated that LG Electronics' electric vehicle parts orders will increase significantly after the establishment of the joint venture.