Joint Venture between Magna and LG According to a joint release between Magna and LG, they made an agreement to establish a joint venture. Their JV is planning to manufacture […]
Joint Venture between Magna and LG
According to a joint release between Magna and LG, they made an agreement to establish a joint venture.
Their JV is planning to manufacture e-motors, inverters and on board chargers and, for certain automakers. The reason behind this agreement is to adapt the growing global shift toward vehicle electrification. The new company, tentatively called LG Magna e-Powertrain, wants to make use of each company’s strengths.
On one hand, Magna has strength in electric powertrain systems and world class automotive manufacturing. On the other hand, LG has expertise in component development for e-motors and inverters.
The JV enables the two companies to continue to grow in electric powertrain market. In fact, the new company will be able to leverage existing technologies, engineering capabilities and global footprints. Of course, the market for e-motors, inverters and electric drive systems will be growing significantly between now and 2030. Therefore, the JV will target this fast-growing global market with a world-class portfolio.
Both companies have their clear intention
Magna President and incoming CEO Swamy Kotagiri explained,“This partnership fully aligns with our strategy of being at the forefront of electrification. In addition, it will support automakers with a diverse and world-class portfolio.” Furthermore, “By combining our strengths, we expect to gain investment efficiency and speed to market with synergies to achieve more. What’s more we can continue to capitalize on the acceleration of the electrified powertrain market.”
President of the LG Electronics Vehicle Component Solutions Company Dr. Kim Jin-yong explained its intention. “Manufacturers need to be disruptive to maintain leadership positions in electrification. Therefore, thanks to this deal, LG is entering a new phase in its automotive components business. It means we can have a growth opportunity with enormous potential.” What’s more, “We believe that the combination of our in-house prowess and the experience and extensive history will transform the EV powertrain space faster than if we proceed alone.”
Who is Magna?
Magna International Inc. is a Canadian multinational mobility technology company. Magna is currently investing heavily in Artificial Intelligence (AI) and Level 5 automation. In fact, it is one of the largest companies in Canada and the largest automobile parts manufacturer in North America. It produces automotive systems, assemblies, modules, and components. Thus, its main customers are General Motors, Ford Motor Company, Tesla as well as BMW, Mercedes, Volkswagen and others.
Magna has more than 157,000 employees, 344 manufacturing operations and 93 product development, engineering and sales centers in 27 countries. They have complete vehicle engineering and contract manufacturing expertise, as well as product capabilities. As a result, the company can produce body, chassis, exterior, seating, powertrain, active driver assistance, electronics, roof systems and others. In addition, Magna has electronic and software capabilities across many of these areas.
Who is LG Electronics Inc.?
According to the same press release, LG Electronics is a global innovator in technology and consumer goods. The South Korean company has a diverse workforce of 74,000. LG is composed of five companies – Home Appliance & Air Solution, Home Entertainment, Mobile Communications, Vehicle component Solutions and Business Solutions.
In 2019 its global sales was USD 53 billion. In fact, LG is a leading manufacturer of various products including TVs, washing machines, refrigerators, air conditioners, and automotive components. LG’s premium brands such as LG SIGNATURE and advanced LG ThinQ are famous, and they feature the company’s AI technology.
Collaboration between hardware companies
As we see the other article about collaboration, the concept becomes more important in mobility market. This is because electrification is accelerating and it soars up faster than our expectation. In addition, the more electrified automotive is, the more important its services and software are. Thus, collaboration will be growing, too.
In this case, we can see the partnership between two hardware companies. Of course, both LG and Magna has strong expertise in software. However, if we have to explain both companies as a hardware or software company, we choose the former. In the article above, we can see other examples between a hardware and a software company like SAIC and Alibaba.
However, in order to adapt the drastic disruption in the automotive market, companies must take every option into consideration. LG’s statement “the agreement will transform the EV powertrain space faster than if we proceed alone” implies the importance of rapid and bold decision of each company.
Electric Vehicle – Adobe Stock