LG Group Executive Personnel Changes Likely at End of November
Business Community Focuses on Vice Chairman Jo Joo-wan's Promotion
Top Performance Among Affiliates... 'Home Appliance Subscription' Business Thriving
Attention on 'Big Deals' in Automotive Electronics and Robotics
As the regular executive reshuffle of LG Group, expected to take place at the end of November, approaches, interest in Cho Joo-wan, CEO of LG Electronics, is growing both inside and outside the group. Attention is focused not only on whether he will be promoted to vice chairman but also on whether Cho will successfully complete a massive merger and acquisition (M&A).
According to the electronics industry on the 8th, Cho will review the domestic market and ongoing businesses this month and will travel to Japan next month with executives from LG Group affiliates. He is expected to visit Toyota’s headquarters in Aichi Prefecture, Japan, to explore ways to collaborate in the automotive electronics (electric and electronic equipment) sector.
This year marks the second time Cho has personally visited a global automobile company. In March, he also visited the Mercedes-Benz headquarters in Stuttgart, Germany, with executives from LG Group affiliates. Automotive electronics is a core area of the ‘Triple 7’ vision (7% annual growth rate, 7% operating profit margin, and more than 7 times corporate value) that Cho presented last July as a goal for the company. Along with robotics, it is also considered a likely M&A target area for Cho this year.
Through this trip to Japan, Cho is expected to assess the current trends and future growth potential of the automotive electronics market and gauge whether to pursue M&A. If a ‘big deal’ is successfully concluded within the year and yields visible results, the business community anticipates that Cho’s chances of promotion to vice chairman will increase significantly. The possibility of Cho’s promotion to vice chairman is greater than ever. Since his appointment in January 2022, Cho has been credited with putting LG Electronics, which was struggling at the time, back on track. Currently, LG Electronics is posting the best performance among LG Group affiliates. In the second quarter of this year, both sales and operating profit recorded the highest figures ever for a second quarter. Sales reached KRW 21.6944 trillion, and operating profit was KRW 1.1962 trillion, up 8.5% and 61.2% respectively compared to the same period last year.
In particular, the home appliance subscription business is regarded as a ‘masterstroke’ achieved during Cho’s tenure. LG Electronics’ home appliance subscription business surpassed KRW 1 trillion in annual sales for the first time last year, reaching KRW 1.1341 trillion. LG Electronics first entered the subscription market in 2009 with water purifiers, and Cho expanded the service to large home appliances. The home appliance subscription business now accounts for more than 20% of home appliance sales in South Korea, and competitor Samsung Electronics is also preparing to enter the market soon.
Cho’s term as an inside director is set to expire in March next year, which further strengthens the possibility of his promotion to vice chairman. Given the likelihood of his reappointment to ensure continuity of LG Electronics’ stabilized business, there is also speculation that the group will recognize Cho’s contributions and give him greater weight by promoting him to vice chairman. Currently, LG Group’s vice chairmen include Shin Hak-cheol of LG Chem and Kwon Bong-seok of LG. The number decreased after Kwon Young-soo, vice chairman of LG Energy Solution (currently senior advisor), retired in November last year.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
