LG Electronics, Magna International joint venture gets EU nod, set for July launch

Seoul [South Korea], May 31 (ANI/Global Economic): The European Commission (EC) gave its approval on the establishment of a joint venture between South Korean electronics manufacturer LG Electronics Inc and Canadian auto parts maker Magna International Inc on May 25 (local time). As a result, the official launch of the joint venture, which is scheduled to take place in July this year, is expected to happen smoothly.

During its annual shareholders meeting earlier this year in March, LG Electronics decided on splitting the electric vehicle powertrain business from its vehicle component solutions (VS) business division.

LG Electronics has a 100 per cent stake in the joint venture, tentatively called LG Magna e-Powertrain, and Magna International plans to acquire a 49 per cent stake in the joint venture.

The capital for establishing the new venture is 30 billion won (approximately 26.7 million US Dollars), and its headquarters will be established in South Korean city Incheon.

The joint venture will produce and sell electric vehicle powertrains capable of producing power of 250 kilowatts (338 horsepower). The market is predicting that annual sales of the joint venture will exceed 200 billion won (approximately 178.2 million US Dollars).

LG Electronics plans to actively target the electric vehicle powertrain market by collaborating with Magna International. It is anticipating to create synergy by combining its expertise in motor and inverter technologies with Magna International’s engineering capability in the powertrain field.

At its first quarter performance conference call last month, LG Electronics forecasted that the joint venture between the two companies “will show a growth rate greater than the market size by year 2025,” and that “the size of the electric vehicle parts market will grow by 35 per cent on average annually by year 2025 from its market size of approximately 10 trillion won last year.”

Meanwhile, the securities industry is predicting that LG Electronics’ VS business division will achieve 2 trillion won (about 1.8 billion US Dollars) in quarterly sales for the first time this year and succeed in turning in a surplus. (ANI/Global Economic)