InvestorQ : Can you tell me about the joint venture between LG and Magna International?
Moii Chavate made post

Can you tell me about the joint venture between LG and Magna International?

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Tisha Malhotra answered.
4 weeks ago
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LG Electronics of South Korea and automotive supplier, Magna International, plan to launch a joint venture to make key components for electric cars. The JV will manufacture e-motors, inverters and onboard chargers. Suppliers to electric cars are currently going through a wave of consolidation to improve their bargaining power.

There have been a slew of such deals in the recent past. Earlier this year Borg Warner had acquired rival Delphi while the three Japanese manufacturers; Aisin Seiki, Denso and Toyota created a new e-axle venture. While LG will own 51% in the proposed joint venture, Magna will own the balance 49%.

Magna currently makes electronic vehicle gear for a number of auto companies including Volkswagen. But the real challenge for them is to gain more control over production of the high-value parts of an electric car. Considering the growing demand for green cars, that could be the right way ahead.

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