LG, Hyundai want to strengthen cooperation in the automotive system

LG Group units, including LG Electronics Inc. and LG Innotek Co., are in talks with Hyundai Motor Group to expand cooperation on automotive systems, according to auto industry sources, in line with the industry’s shift to software-defined vehicles.

Earlier this month, senior managers of LG Electronics’ automotive electronics division visited Hyundai Motor’s Namyang R&D center in Hwaseong in South Korea at the invitation of Hyundai Motor Co. for its Tech-Doctor Day event.

This week, executives of LG Innotek, the world’s leading camera module maker, are scheduled to meet with senior executives of Hyundai Motor at the Namyang R&D center, according to sources on Sunday.

They are understood to be discussing strengthening their integration with car systems ranging from infotainment software to cameras and sensors for autonomous driving.

Their meetings come after LG Group executives recently presented its latest automotive electronics technology at Mercedes-Benz headquarters in Germany, where the German carmaker’s Chairman Ola Kalenius noted LG Group’s contribution to developing the technology its self-driving.

“As far as I know, Hyundai Motor invited the LG Group’s auto system manufacturers after hearing about the cooperation model between Mercedes-Benz and LG,” said an electric industry official.

LG Group also hopes to expand its partnership with Hyundai Motor Co. and Kia Corp, under the world’s third largest car group.

LG Display Co. provides OLED panels suitable for the 2024 model of the GV80 sport utility vehicle under Hyundai’s premium Genesis brand.

TURN FOR PROFIT

LG Electronics has launched an in-car electronics business in 2013 with the expectation that the concept of the automotive industry will shift to electrification and autonomous driving.

Since then, it has grown through M&As, including the purchase of ZKW Group, a German automotive lighting and lighting systems company, for more than 1.1 billion euros ($1.2 billion) in 2018, marking LG’s largest acquisition ever.

In 2021, it launched LG Magna e-Powertain, a joint venture with Magna International, a Canadian auto parts manufacturer.

LG Electronics’ automotive systems unit turned a profit in 2022, reversing its loss-making streak. Its sales exceeded 10 trillion won in 2023.

Its order deficit is estimated to exceed 100 trillion won ($72 billion) this year. It claims Mercedes-Benz, Porsche and BMW, as well as General Motors, Hyundai Motor and Kia as customers.

LG Innotek also develops electronic components for cars, including in-car cameras, LEDs and power modules for EVs and autonomous driving.

Automakers are scrambling to develop self-driving systems to Level 3, considered their new battleground. Vehicles with Level 3, 4 or 5 automated systems do not require human supervision.

However, due to safety concerns about autonomous driving, car manufacturers are pushing back the launch of a Level-3 autonomous car, including the Apple Car.

In January this year, Apple downgraded its automation features to Level 2 from Level 4 following a series of security incidents.

Aptive Plc, an American self-driving technology company, has decided not to raise additional capital in Motional, a 50:50 joint venture with LG, citing challenges in realizing fully autonomous driving.

“Hyundai Motors will try to have LG and Samsung as partners to develop software-defined vehicles (SDVs),” an auto industry official said.

Samsung Group is also a major supplier of automotive systems, including semiconductor chips, in-car displays, image sensors and cameras, to Hyundai Motor Group.

It is known that they recently studied to acquire the advanced driver assistance systems (ADAS) segment of Germany-based Continental Automotive.

Write to Chae-Yeon Kim at why29@hankyung.com
Yeonhee Kim edited this article