An LG employee walks inside LG Science Park, western Seoul, on July 7, 2023. (Yonhap)
SEOUL, July 12 (Korea Bizwire) — LG Electronics Inc. unveiled a new vision for its business on Wednesday to turn itself into a “smart life solutions provider,” as the traditional home appliance market has been going through rapid changes.
The South Korean tech company said it will put more focus and resources into non-hardware products, such as smart home business and webOS, LG’s own smart TV operating system, and business-to-business solutions, including electric vehicle (EV) parts business.
LG also said it will continue to expand its footprint in what it defines as new growth areas, such as digital health care, robots and electric charging stations.
Under the new vision, the company plans to increase annual revenue levels to 100 trillion won (US$77.3 billion) by 2030, from around 65 trillion won last year.
LG said it will try to raise the proportion of the three sectors — non-hardware products, B2B solutions and new growth areas — up to 50 percent of its business portfolio by that year and invest more than 50 trillion won to reach that goal, including 25 trillion won in research and development, and 17 trillion won in infrastructure.
“We are not going to settle for the best home appliance maker, but will make a leap forward in becoming a smart life solution company, which connects and extends consumers’ spaces and experiences,” LG Electronics CEO Cho Joo-wan said at a press conference, held at LG Science Park in western Seoul.
The move came amid lingering global economic uncertainties and changes in household appliances market trends, especially on the heels of the COVID-19 pandemic.
“Today, businesses face many external challenges and uncertainties, like the Russian-Ukraine war, high inflation and slowing global economy. But answers lie in the market and customers,” Cho said.
LG Electronics CEO Cho Joo-wan speaks at a press conference held at LG Science Park in western Seoul, on July 12, 2023. (Yonhap)
LG said its business has reached an inflection point, with growing importance of customer service, digitalization and electrification of traditional home gadgets and automobiles.
In the past few years, LG has sought to diversify its business portfolio and been shrewd in making decisive business decisions to stay competitive in the rapidly changing tech environment.
Having exited the smartphone business in 2021 and the solar panel business early last year, the company put more resources in EV components, connected devices, smart homes, robotics and artificial intelligence (AI).
LG’s 10-year-old EV parts business, which made a turnaround in the fourth quarter of last year, made 8.6 trillion won in sales last year and is projected to log sales of 10 trillion won this year.
LG plans to increase its annual sales to more than 20 trillion won by 2030.
In-vehicle infotainment systems, e-powertrain and headlamps will take up a ratio of 5:3:2 of the 2030 sales target, LG said.
This file photo provided by LG Electronics Inc. on July 13, 2021, shows the company’s new indoor-outdoor delivery robot.
In late May, LG said it was working with Canadian AI computing startup Tenstorrent to develop chips that could potentially power LG’s smart consumer appliances and automotive products.
About a week earlier, LG announced it started mass production of EV chargers, in a push to advance into the EV charging solutions business amid the global electrification trend.
LG plans to enter overseas EV charging markets, beginning in North America next year, and to build manufacturing facilities within this year to target the market.
The world’s EV charging solutions market is expected to grow to $142.36 billion by 2030, from $12.4 billion in 2021, according to the New York-based Strategic Market Research, as carmakers rapidly adopt battery-powered vehicles in their lineups amid stricter emissions regulations.
LG began developing EV charging solutions in 2018 and formed a division dedicated to overseas EV business in November last year.
In April, the company launched a new brand campaign as part of efforts to adapt to changing consumer tastes and market conditions, and to be ready to make touchpoints to better engage with consumers.
Last week, LG estimated its second-quarter operating profit at 892.7 billion won, up 12.7 percent from a year earlier, on strong performance of premium consumer products and EV parts business.
The company has been working to reduce costs and restructure its business portfolio to “preemptively” deal with slowing demand.
It has been running what it calls a “war room” to actively tackle global financial headwinds by removing inefficient working practices and focusing on core businesses, among others.
(Yonhap)
