LG Group’s auto business is expected to reach 3 trillion won ($2.9 billion) in sales this year and will continue to be on the upturn on the back of close partnerships being forged with global carmakers, industry watchers said.
“LG Electronics’ vehicle components unit may see 30 percent growth in sales in 2017 on the grounds that the company’s talks with global carmakers appears positive this year,” said Kim Ji-san, an analyst at Kiwoom Securities.
The business achieved 1 trillion won in sales in 2013, and it is expected to see 10 percent growth this year, Kim said.
“LG has been in talks with European carmakers such as BMW and Volkswagen for the last few years to provide its infotainment solution. It has a high possibility of striking a deal this year,” said an industry source who declined to be identified.
LG Electronics currently operates its own platform for infotainment solutions, meaning it would not be too difficult to provide similar solutions for a variety of carmakers, the source said.
The Japanese carmaker Honda is reportedly in talks with LG Electronics to buy its infotainment systems and motors for its electric vehicles.
Kim added that LG Innotek, an electronics parts maker affiliated with LG Group, achieved 450 billion won in auto-related sales last year, and it will reach 570 billion won this year. Also, LG Display, which hit 500 billion won last year, will see 30 percent growth this year.
“LG Chem’s automotive battery (operation) will reach 600 billion won in sales this year, up from 500 billion won last year. The upturn will continue as the global movement to regulate CO2 emissions from new vehicles will kick in from 2015,” said Son Young-joo, an analyst at Kyobo Securities.
On Sunday, LG Electronics joined the Open Automotive Alliance, a group of global carmakers and tech giants ― including General Motors, Hyundai Motor, Honda and NVIDA ― that are committed to integrating Google’s Android operating system with cars. The company is slated to take aim at global car parts markets by building a close partnership with global automotive and electronics makers.
By Shin Ji-hye (
shinjh@heraldcorp.com)
