The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Dongwon Kim - KB Securities Co., Ltd., Research Division - Analyst
: [Interpreted] I have 2 questions to VS. First, I would like to ask for your mid- to long-term projections on the Vehicle Components business. Could
you elaborate in detail in infotainment, LG Magna and ZKW?
My second question is also to the VS business. I understand that recently, LG Magna e-Powertrain, together with ZKW, decided to establish plants
in Mexico, and they are making active investments at the moment. Could you tell us about the background of such investment? Is it because you
have secured new clients in North America or because you expect the order intake growth to remain high?
Unidentified Company Representative
[Interpreted] I would like to answer your first question. VS company is confident that we are equipped with a sound foundation of growth based
on over KRW 60 trillion worth order backlog as of last year. And based on the mid- to long-term strategy of each business, we'll work to strengthen
our position as a global vehicle component provider.
To start with infotainment, we have developed integrated cockpit based on software capability and enhanced our cyber security-related business.
And as a result, we are expecting growth of mid- to high teen level based on strategy to expand products with high added value.
Next, the EV component business will accelerate growth by approximately 50% level through securing business capability and diversifying customer
and product portfolio based on cooperation with Magna.
Last but not least, the Vehicle Lamp Business. We are working to achieve continuous growth based on sound profitability with large volume
consumer or product mix structure and better operating capabilities. Expected growth rate is in the mid- to high teens.
Unidentified Company Representative
[Interpreted] I would like to answer your second question regarding investment in the Mexico plant. The United States is asking OEMs and Tier 1
suppliers to satisfy their United States, Mexico, Canada agreements, or USMCA conditions, in order to invigorate their EV industry and create jobs.
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JULY 29, 2022 / 7:00AM, 066570.KS - Q2 2022 LG Electronics Inc Earnings Call
As a result, we have decided to build a plant in Mexico in order to have a competitive edge in winning orders in the future and to secure more
business opportunities. We are currently expecting our investment in building the Mexico plant to bring greater chances of supply, not only to
North American OEMs, but also to Korean and Japanese OEMs that are targeting the U.S. market.
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