LG Electronics’ automotive electronics business is expected to enjoy the first surplus in 26 quarters in the second quarter of this year. Its order intake is expected to approach 70 trillion won by the end of this year.
On June 28, ZKW, a subsidiary of LG Electronics, announced that it signed a contract to supply smart lighting systems for Swedish automaker Volvo’s new electric vehicle models — the C40 and the XC40. The smart lighting systems are smart headlights that can control each of 84 LEDs. Daytime running lights, low beams, high beams, and turn signals are all combined in a compact size.
Headquartered in Austria, ZKW is known to have the world’s best technology in the field of headlamps, a key lighting component for automobiles. Its major customers are German automakers such as Mercedes-Benz, BMW, Audi and Porsche.
ZKW was acquired by LG Electronics in 2018 and is one of the three pillars of the company’s automotive electronics business. The biggest part is the VS Business Division that produces vehicle infotainment systems and the other part is LG Magna e-Powertrain, an electric vehicle parts maker jointly launched by LG Electronics and Canada’s Magna International, the world’s third-largest parts maker.
The VS Business Division signed a large contract with Mercedes-Benz early this year to supply plastic OLED-based in-vehicle infotainment (IVI) systems for the premium electric vehicle model EQS. Industry insiders expect that LG Electronics will supply IVI systems for major electric vehicle models to be produced by Mercedes-Benz.
LG Magna e-Powertrain held a groundbreaking ceremony for an electric vehicle parts production plant in Mexico in April. It produces key parts such as drive motors and inverters for GM’s next-generation electric vehicles. Mexico is home to LG Magna e-Powertrain’s third production base, with the first base in Incheon in Korea and the second one in Nanjing in China. The Mexican plant will mainly target the U.S. electric vehicle market. Many industry insiders believe that if Apple’s electric vehicle becomes a reality, it will use parts from the Mexican plant.
LG Electronics has seen its order balance steadily growing. Analysts expect the order backlog to grow from 60 trillion won at the end of last year to 70 trillion won by the end of this year. As the era of electric vehicles and autonomous vehicles is fast approaching, the automobile industry’s demand for related parts is on a sharp rise.