이 기사는 2022년 04월 22일 08:08 thebell 에 표출된 기사입니다.

LG Magna e-Powertrain, a joint venture between South Korea’s LG Electronics and Canadian auto parts maker Magna International, will build a new plant in Mexico as it seeks to mitigate supply chain risks and strengthen its foothold in the North American market.

LG Magna broke ground on its new facility in Ramos Arizpe, Coahuila, on Tuesday. LG Electronics, its parent company, spent $100 million on the plant’s equipment alone, excluding other costs such as land.

The new plant is LG Magna’s first production facility outside Asia. The company currently has two factories – one in Incheon, South Korea, and the other in Nanjing, China.

Ramos Arizpe, a city in the middle part of Mexico, is an auto industry hub in the country. LG Magna’s plant will be built near Magna Powertrain’s manufacturing facility. Also in Mexico are a plant of ZEW, LG Electronics’ automotive lighting subsidiary, and South Korean automaker Kia’s factory that makes electric vehicles.

To build a new plant is part of efforts by LG Electronics to address potential supply chain issues amid a heightened risk of the Covid-19 lockdown crisis around the world. Especially, China continues to pursue its zero-Covid policy by enhancing its lockdown measures to prevent the spread of infection.

The global chip shortage, which caused a sharp increase in operating costs, was one of the reasons LG Electronics’ Vehicle component Solutions (VS) division failed to turn profitable last year.

A slowdown in auto production also affected parts suppliers overall. However, the VS division’s profit turnaround was delayed largely due to cost increase – especially given that annual revenue from the division topped 7 trillion won ($5.6 billion) for the first time last year. The VS division recorded 53.6 billion won in operating loss in the October-December quarter last year.

LG Electronics has been doubling down on supply chain management. Earlier this year, its supply chain department was elevated to a higher level and a new team in charge of chip procurement was created.

Partnership with GM

LG Magna’s new factory in Mexico reflects its strong partnership with General Motors. Its Ramos Arizpe plant will make key parts such as inverters and motors used in the US automaker’s electric vehicle models. GM has electric vehicle factories in the US and Mexico.

GM previously announced that it would increase spending on electric and autonomous vehicles to $35 billion and bring 30-plus new models to the global market by 2025. The auto giant also has a battery joint venture with LG Energy Solution, the battery arm of LG Group.


The plant’s groundbreaking ceremony, held on Tuesday, was attended by executives from LG Electronics, Magna International, LG Magna and GM as well as the city’s officials.

LG Magna is also expected to use its Mexican plant as a stepping stone to strengthen its foothold in North America, one of the biggest electric vehicle markets in the world. US electric car sales of 60,000 units in January were the third largest after China (350,000 units) and Europe (120,000 units), according to research firm MarkLines. (Reporting by Hyun-ji Sohn)