LG Boldly Invests on its VS Division

LG Electronics invests into its Vehicle Component Solutions business.

Company officials said on Sunday that LG Electronics strengthened its business portfolio by making daring investments in automotive electrical systems and parts to advance their technological edge and create a breakthrough for the unprofitable division.

According to the firm’s quarterly report, the electronics manufacturer’s investments into the Vehicle Component Solutions (VS) division this year are estimated to climb around 900 billion won ($771 million).

In the first three quarters alone, the company invested 442.8 billion won into the division. It also plans to increase the investment an additional 455.7 billion won by the end of the 4th quarter this year.

LG’s VS division is responsible for the development and manufacture of in-vehicle infotainment systems, parts for self-driving cars, and vehicle motors, among others.

The company’s investment into the division this year grew by 27 percent from last years’ 709 billion won.

The 908.5 billion won investment by the company into its principal business, the Home Appliance and Air Solution (H&A) division, is notably similar to last year’s amount.

Research and development are the main focus of investments.

An LG official said, “The area of automotive electrical parts and systems has great growth potential, and is one of the businesses that will lead the future of LG Electronics.” The official added, “We will continue to make consistent investments into the VS division in a bid to secure competitive power.”

The company stated, in its third-quarter earnings report on October 30, that its VS division suffered an operating loss of 60.1 billion won. The estimated operating loss for 2019 by securities companies is about 200 billion won.

A company official, at the time, announced during a media conference that the tech giant is working to improve the division’s earnings by fine-tuning its overall management as “automobile companies are changing their strategies for the medium and long term.”

LG Electronics, to enrich its capabilities, signed a business agreement with Microsoft to jointly develop software for autonomous vehicles run by artificial intelligence (AI) technology.

During the Internationale Automobil-Ausstellung (IAA), also known as the International Motor Show Germany, the Korean company demonstrated a new system that incorporates its webOS Auto in-vehicle infotainment system with Microsoft Connected Vehicle Platform (MCVP). The IAA took place in September in Frankfurt.

According to LG Electronics, the in-vehicle infotainment system, taking advantage of the combined strengths of MCVP and webOS Auto, collects and transmits a wide variety of information such as app use, door status, and driver status.

The company acquired ZKW in August last year to expand its customer base from its clients, such as Porsche and BMW. ZKW is an Austria-based automobile lighting supplier.

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