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[Asia Economy Reporter Han Ye-ju] The new growth engine for LG Group is the automotive electronics sector. The three electronic affiliates of LG Group are transforming into a trio specializing in automotive electronics. LG Display and LG Innotek, led by presidents with the surname Jung, are preparing for the group's future alongside their elder brother LG Electronics, aiming for renewed growth.

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LG Electronics' flagship automotive electronics business is in the infotainment (information + entertainment) equipment sector, such as car navigation systems. They are expanding their automotive electronics business across three main areas: electric vehicle powertrains, lighting, and infotainment.

Recently, LG Electronics' automotive electronics business has grown rapidly. The VS Business Division recorded annual sales of KRW 8.6496 trillion last year. For the first time, the automotive electronics business accounted for more than 10% of total sales. The annual operating profit turned positive at KRW 169.6 billion. As of the end of last year, LG Electronics' automotive electronics order backlog stood at around KRW 80 trillion. The order backlog has been increasing by about KRW 20 trillion annually, and it is expected to approach KRW 100 trillion by the end of this year.

LG Display, LG Group's leading electronic components company dominating the global display market, has been focusing on expanding its automotive display business since President Jung Ho-young took office. Although it has retreated somewhat in the LCD market due to low-cost competition from Chinese panel makers, LG Display plans to leverage its experience leading the generational shift to organic light-emitting diode (OLED) panels to establish a strong presence in automotive displays.

This is also a proactive measure reflecting the current negative display market conditions. LG Display posted its worst performance since its founding last year, with annual sales of KRW 26.1518 trillion and an operating loss of KRW 2.085 trillion. LG Electronics, its main client, provides a solid demand base as a global company, but the display panel orders were hit hard due to inventory adjustments in TVs and home appliances.

Given the nature of the display industry, a quick market recovery is unlikely, but the growth of the company's automotive display division and the ongoing large-scale structural reforms are promising. According to Omdia, LG Display held a 16.9% market share in the premium automotive display market for displays larger than 10 inches in the third quarter of last year, ranking first. LG Display plans to expand its order volume with automotive plastic OLED (P-OLED) and widen the gap with latecomers. Currently, LG Display is the only supplier of automotive P-OLED. Additionally, it aims to commercialize ultra-large, slidable, and transparent OLEDs for vehicles by 2026 to expand its market leadership.

Another LG Group electronic components company, LG Innotek, which has established itself as Apple's largest camera module supplier, is also undergoing structural reforms by focusing on automotive motors, sensors, and camera modules.

During President Jung Cheol-dong's tenure, LG Innotek achieved record-breaking performance every year. Last year, it posted sales of KRW 19.5894 trillion and an operating profit of KRW 1.2718 trillion, marking the fourth consecutive year of record-high results. This year, sales are expected to grow to between KRW 22 trillion and KRW 23 trillion, potentially surpassing LG Display's annual sales for the first time.

However, President Jung is seeking future growth engines in substrate materials and automotive electronics to reduce dependence on Apple. In particular, he plans to continue improving profitability through efforts such as optimizing the global supply chain management (SCM). The automotive parts business has already demonstrated growth potential in terms of performance. Last year, LG Innotek's automotive parts business sales increased by 45% year-on-year to KRW 421.4 billion, maintaining six consecutive quarters of sales growth.