The European Commission (EC) has approved 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. This will ease the launch that is scheduled to take place in July this year, reports ANI.
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 cent percent stake in the joint venture, tentatively called LG Magna e-Powertrain. Magna International plans to acquire a 49% stake in the joint venture.
The JV will be headquartered in South Korean city of Incheon and the cost of establishing the new venture is 30 billion Won (nearly $26.7 million). It will produce and sell electric vehicle powertrains capable of producing power of 250 kilowatts. The market is predicting that annual sales of the JV will exceed 200 billion won (nearly $178.2 million).
LG Electronics plans to actively target the electric vehicle powertrain market, and this collaboration will help it achieve this goal. It looks forward to combine 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. It also said that the size of the electric vehicle parts market will grow by 35 % on average annually by year 2025 from its market size of nearly 10 trillion Won last year.
Meanwhile, the securities industry is predicting the LG Electronics’ VS business division to achieve 2 trillion Won (about $1.8 billion) in quarterly sales for the first time this year and succeed in turning in a surplus.
