The LG group has made the strategic decision to discontinue its smartphone market operations due to consistent financial losses over the years. Instead, the company will shift its focus to the production of electric car parts, a sector that promises substantial profitability.
LG has forged a partnership with Magna, one of Canada’s leading component manufacturers, to navigate the challenges of this new venture. Although relatively new to the electric car parts market, LG will be competing against established players.
Despite the competition, the partnership aims to leverage both companies’ strengths in electric drive systems, networks, motors, and inverters, ultimately delivering desirable products to consumers.
The joint venture will operate under the name “LG Magna e-Powertrain” and will specialize in the production of electric vehicles, inverters, vehicle-mounted chargers, and related systems. LG has previous experience in manufacturing batteries and motors for various electric vehicles.
This endeavor represents a new direction for LG. Javier Perez, COO of LG Magna e-Powertrain, stated, “The electric motor, inverter, and e-drive system market are expected to grow significantly from now until 2030.”
In its Q2/2021 business results, LG reported a 4.8% increase in revenue compared to the same period last year, reaching $15.26 billion. These figures are particularly remarkable given the company’s exit from the mobile phone manufacturing sector. Profits also saw a significant boost, increasing by 65% to $992.08 million.
Other sectors of LG’s business also displayed impressive growth. The air solution and air quality solution segment witnessed a 32.1% revenue increase to $6.08 billion, while the home entertainment and appliance segment achieved a 79.1% increase in revenue, amounting to $3.6 billion.
Furthermore, operating profit surged by 216.4%, driven by positive performance in the automobile solutions and components segment, which successfully implemented several new technologies. LG’s Solution and Vehicle Components company recorded a 106.5% revenue increase to $1.68 billion, attributed to the recovery of the auto industry and the growing demand for electric vehicle components.
Source: VnExpress
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