LG Magna breaks ground for EV parts factory in Mexico

LG Magna e-Powertrain Co. broke ground on Tuesday for a factory to produce electric vehicle components in Mexico to meet the growing demand for eco-friendly automobiles in North America.

The EV powertrain joint venture between South Korea’s home appliance giant LG Electronics Inc. and Canada’s auto parts maker Magna International Inc. is scheduled to complete the construction of the plant in 2023, LG Magna said in a statement.

“We will become a key partner for EV components in the North American auto industry with the new plant,” said LG Magna CEO Cheong Won-suk in a statement.

The 260,000-square-foot factory is built in Ramos Arizpe where major automakers such as General Motor Co. and parts makers operate plants. Magna International also has a factory there.

LG Magna’s plant is set to produce key components including motors and inverters for GM’s next-generation EVs.

The JV currently operates production bases in Incheon, South Korea, and Nanjing, China.

LG ELEC’S FOCUS AUTOMOTIVE ELECTRONICS BUSINESS

LG Electronics has been fostering its automotive electronics business to become a gamechanger in the future mobility market since the company set up a vehicle component division in 2013. The electronics behemoth expanded the division to a vehicle components solutions (VS) unit that covers infotainment technology.

In 2018, LG Electronics acquired Austria-based automotive lighting company ZKW Group whose clients include German premium carmakers such as Mercedes Benz, BMW, Audi and Porsche.

Last year, LG Electronics took over an Israeli cybersecurity firm Cybellum for the automotive security business. LG Electronics also developed 5G wireless platforms for next-generation connected cars with Qualcomm Technology Inc.

Sales of LG Electronics’ automotive electronics business is expected to rise 23.8% to 8.9 trillion won this year, making up more than 10% of the company’s total revenue. The business reported sales of 7.2 trillion won in 2021, up 23.9% from the previous year.

Such growth strengthened the foundation of the business that has yet to report a profit.

“LG Electronics has been establishing a healthy business foundation,” said LG Electronics CEO Cho Joo-wan, who reportedly focuses on the automotive electronics business, in a new-year speech for 2022. “It is time to continue growing and foster preparation for the future based on this.”

Write to Ji-Eun Jeong at jeong@hankyung.com
Jongwoo Cheon edited this article.