LG Electronics aims to generate $17 billion in annual revenue from its vehicle solutions division by 2023, accounting for about 20 percent of total revenue, up from 14 percent in the first half of this year, according to CEO William Cho.
Electric vehicles will become the company's main growth driver, Cho said in his first interview since taking over as CEO of LG Electronics in 2021.
“I am confident that the company will become one of the leading players in the mobility industry,” Cho said. “We will focus on what we do well.” He said that was understanding customers and being able to respond to rapidly changing technologies. LG has no plans to make its own electric vehicles (EVs), though.
Mr. Cho is looking to transform the 65-year-old giant into a company that increasingly embraces digitalization, electrification and services related to devices.
Under a long-term strategy announced in July 2023, the company will spend at least 50 trillion won ($37 billion) on new businesses by 2030. It will help diversify away from its high-cost, thin-margin hardware business, especially as inflation and recession fears weigh on electronics demand.
LG has a foothold in the vehicle market, with $80 billion in orders for technologies such as electronic powertrains, according to its CEO. General Motors and most automakers in North America and Europe are LG customers.
Responding to a question about the rumored EV partnership with Apple, Mr. Cho only said “confident and ready to cooperate with current and future car manufacturers”.
On the new journey, LG faces a number of challenges such as geopolitical tensions and competition from Chinese rivals. In the face of the trend of shifting supply chains out of China, Mr. Cho said LG has no plans to do so and is closely monitoring the situation.
In the electronics market, companies like LG must increase innovation, advertising and investment to cope with the "storm" coming from the mainland, according to Bloomberg experts.
According to Mr. Cho, competition from Chinese peers is increasing in the home appliance and low-end TV segments. LG's goal is to dominate both the high-end and low-end segments, generating revenue from device-related services.
“We need to continue to lead the market,” LG Electronics CEO did not hide his ambition.
(According to Bloomberg)
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