LG Electronics-Magna joint venture/photo provided by LG Electronics
Magna International, the world’s third-largest auto parts maker, is LG Electronics(140,000 +1.08%)Expectations for the establishment of a joint venture with
On the 12th (local time), through the’Magna Live’ event held at the world’s largest IT and home appliance exhibition’CES 2021′, “The establishment of a joint venture is vertically integrated into the powertrain production of electric vehicles. It will make it possible.”
“70% of the cost of an electric vehicle’s powertrain system is comprised of e-motors and inverters,” said James Tobin Magna, senior director. “So vertical integration of these components into the portfolio is paramount.
“LG Electronics has a large-scale production capacity,” he said. “This will enable vertical integration, which is critical for Magna’s success in the electric vehicle market,” he directly expressed expectations for the joint venture.
Earlier, on December 23, last year, LG Electronics announced the establishment of a joint venture in the electric vehicle powertrain field of KRW 1 trillion with Magna, the world’s third-largest auto parts maker. The joint venture was established by LG Electronics holding 100% of the company’s stake in the newly established company through physical division, and Magna taking over 49% of the company’s stake.
Director Tobin pointed out that LG Electronics already has a product portfolio for Magna to choose from as another advantage of establishing a joint venture. LG Electronics is currently mass-producing e-motors and inverters at factories in Korea and China.
Director Tobin said, “LG Electronics is already supplying products to General Motors (GM) and Jaguar Land Rover,” and “If Magna’s global customers are strategically switching to electric vehicles, the list of customers of the joint venture will expand in the future. “I said.
Swami Kotagiri, CEO of Magna and Kwon Bong-seok, CEO of LG Electronics/Photo Credit=LG Electronics
When asked for an example where LG Electronics’ building blocks (parts) will be used to complete the powertrain system, Magna cited the electric vehicle currently being developed by Magna aiming to output 250 kilowatts (kW).
Ron Flory Magna, head of strategy, said, “Currently, Magna’s portfolio does not have this building block.” “LG Electronics has both e-motors and inverters for this.”
“When a joint venture is established, we can use it to make products.” “(Through this), we can reduce both lead time (time from initial product design to completion) and cost in terms of product development as well as mass production. It will be.”
Earlier at the CES 2021 press event held the day before, LG Electronics and Magna announced that the establishment of a joint venture was to combine their strengths and strengthen the two companies’ position in the electric vehicle powertrain market.
Swami Kotagiri, CEO of Magna, told a press event the day before, “Magna has engineering capabilities such as electric powertrain integrated system, and LG Electronics has technology for key parts of electric vehicle powertrain such as motors and inverters.” Said.
“We will be the best supplier in the automotive parts and solutions industry,” said Bong-seok Kwon, president of LG Electronics. “By establishing a joint venture with Magna, we have a good position to achieve this goal in the electric and connected vehicle field.” .
Meanwhile, with the launch of a joint venture with Magna, LG Electronics will promote the auto parts business by dividing it into three axes: VS Business Headquarters (focus on infotainment), ZKW (Lamp), and LG Magna e-Powertrain (tentative name).
Seongsu Bae, reporter of Hankyung.com [email protected]