LG is accelerating in going after automobile display market. It went into process of mass-production after signing off on contracts about supplying Center Information Display (CID) to globally popular automobile businesses such as Honda, Porsche, BMW, Mercedes-Benz, and others. As its contract that supplies to most of large-sized automobile businesses is accomplished, it seems that there will be a change of dynamics in display market for automobiles that has been led by Japanese and Taiwanese businesses until now.
According to industry, LG Electronics recently expanded its production facility at Hai Phong Factory in Vietnam and went into process of mass production of CIDs. CID is a central monitor that is located between driver and passenger side and it is materialized in panels that have touch sensors such as navigation, audio, and other functions.
A product that is being mass-produced first is Honda’s products and its height is 7-inch and its width and length are 184mm and 103mm respectively. Afterwards LG is going into trial production of products for Porsche in September. Its height is 12-inch and its width and length are 291mm and 110mm respectively. After going into trial production of Porsche CID for 6 months, it is going to officially mass-produce its products in first half of 2016. Although LG had supplied displays for navigation application to global automobile businesses in the past, this is the first time it is supplying CIDs.
Other than working on these products, LG Electronics is also going to officially start on developing CIDs for BMW, Mercedes-Benz, and GM in end of 2015. It already finished production of its concept sample and it is going to work on additional verification of products, testing, and designing process.
As LG Electronics secured rights to supply high-class CIDs to most of global automobile businesses, it recently extended its production line in Hai Phong Factory in Vietnam. Although its exact scale of size is yet to be known, it set up a plan to expand in long-term.
LCD that is produced at LG Display’s factory in Nanjing, China is going to be applied on CID’s panel, which is its major component. Its LCD is a full-HD In Plane Switching (IPS327) LCD that has high visibility. LG Electronics is going to receive LCD panels from LG Display, add additional motor modules at factory in Vietnam, and supply to finished-automobile businesses.
A reason why LG Electronics is increasing weight of production in Vietnam instead of using its current automobile part factory in China is because it wants to secure competitive edge in production cost. Personnel expensive in Vietnam are cheaper than the one in China.
Display market for automobiles is mostly controlled by Japanese businesses. According to market investigative business called Display Search, Japanese display industry has 44% of market shares according to standard of shipment of display for automobiles in last year. LG Display is the only Korean business to record 12% in market share.
“It is meaningful that LG beat out Japanese businesses, which had been maintaining its relationship in technological cooperation with popular German automobile businesses, and secured majority of supplies. Because CID’s unit cost is especially higher than normal large TV displays, it will be a big help in diversifying LG’s profits.” said a person in this industry.
LG economy researcher predicted that size of automobile display market, which was $4.4 billion last year, will grow to more than $6 billion in 2019.
Staff Reporter Sung, Hyeonhee | sunghh@etnews.com