By Woo Jae-yeon
SEOUL, Dec. 21 (Yonhap) -- LG Electronics Inc.'s new CEO Cho Joo-wan recently visited Austrian automotive light maker ZKW Group, people with knowledge of the matter said Tuesday, in a sign the South Korean tech giant is looking to enhance its advanced car parts business.
Cho made his first overseas trip to the LG subsidiary in Austria since taking office last month, along with Eun Seok-hyun, president of LG's Vehicle component Solutions (VS) unit, to discuss business growth strategies and industry issues, they said.
LG Electronics and its parent LG Corp. acquired automotive lighting and headlight systems provider ZKW in 2018 for more than 1.1 billion euros (US$1.24 billion), the company's largest acquisition to date, in order to expand its presence in the growing global automotive component market.
ZKW, which has global carmakers like BMW, Daimler and VW as its customers, logged 1.03 billion euros in sales in 2020 and said it expected to set a new sales record next year, with its order books bulging with demand for the next three years.
LG Electronics, one of the key home appliance makers at home and abroad, has been focusing on bolstering its automotive business in recent years for its future growth.
In July, the company established LG Magna e-Powertrain, a joint venture with Canadian auto parts maker Magna International Inc., to research and produce powertrain products, like motors and inverters, and on-board chargers for electric vehicles.
For the July-September quarter, LG's vehicle component solutions unit, producing products like navigation systems, instrument cluster, head-up displays and Human Machine Interface solutions, logged sales of US$1.5 billion, up 4.8 percent from a year ago. Its operating profit, however, recorded a loss of $464.3 million due to a one-off cost for General Motors' recall of the Chevy Bolt EV.
"LG's VS division is expected to make a gradual turnaround next year, as the global chip shortages are forecast to ease and the news that Apple is accelerating efforts to launch an autonomous vehicle sends a positive signal over the growth of LG," Park Kang-ho, an analyst at Daishin Securities said in a recent report, referring to the industry rumors that LG might expand its business partnership with Apple into the vehicle component sector.
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