In a strategic move to solidify its position in the burgeoning global electric vehicle (EV) market, LG Magna e-Powertrain Co., a collaborative effort between South Korea's LG Electronics Inc. and Canada's Magna International Inc., has unveiled plans to construct an electric vehicle parts factory in Hungary. The establishment of this facility aligns with LG's ambitious objective of leading the future mobility sector.
Scheduled to commence operations in 2026, the newly planned factory, situated in Miskolc, Hungary, will initially focus on the production of driving motors. However, LG Magna intends to diversify its manufacturing portfolio in response to market demand. Unfortunately, specific financial details regarding the investment remain undisclosed as of the latest announcement.
Commenting on this development, LG Magna's CEO, Cheong Won-suk, emphasized the pivotal role of the Hungarian facility in the company's quest to become a foremost provider of mobility solutions within the rapidly expanding global EV market. This new plant will complement existing facilities in Mexico, China, and South Korea.
The selection of Hungary as the factory's location was based on several factors, including its accessibility to European automakers and the presence of Magna's established facilities in the region. Miskolc, in particular, boasts robust logistics and transportation infrastructure conducive to the development of the automobile and machinery industries.
The LG Electronics-Magna International joint venture was inaugurated in July 2021, with the primary objective of bolstering LG's future mobility endeavors. This collaboration combines Magna's expertise in electric powertrain systems with LG's proficiency in component development for e-motors, inverters, and on-board chargers. Notably, LG Electronics holds a 51% stake in the joint venture, while Magna retains the remaining ownership.
The establishment of the new factory in Hungary signifies LG Electronics' commitment to transforming from a household appliance giant into a global leader in the future mobility sector. CEO Cho Joo-wan emphasized the company's intent to leverage its knowledge and capabilities from the home appliance and information technology sectors to drive innovation in mobility solutions.
During a press conference at IAA Mobility in Munich, Cho stated, “We strongly believe future mobility should focus on the mission to deliver another level of customer experience. LG, with innovative mobility solutions, is more than committed to this mission.” He also extended an invitation to industry leaders to join LG in this transformative journey and hinted at potential acquisitions in the automotive electronics sector.
As part of its vision for future mobility, LG Electronics has developed three customer experience themes for automobiles: transformable, explorable, and relaxable. Cho envisions redefining the car as a “personalized digital cave” and believes that LG Electronics can support this shift through its displays, home appliances, and digital health technologies.
Furthermore, LG Electronics has been expanding its presence in the automotive electronics sector. Its vehicle component solutions division focuses on in-vehicle infotainment, while ZKW Group, acquired in 2018 and based in Austria, and LG Magna are engaged in car lighting and EV powertrain businesses, respectively.
In the realm of market research, LG Electronics demonstrated its leadership in the global vehicle telematics market last year, boasting a 23.3% market share. The company has consistently maintained a double-digit share in the audio, video, and navigation segment since 2021, according to market research firm Strategic Analytics.