LG Innotek's automotive camera business managed to turn a profit for the first time this year. It is interpreted as the result of improved synergy due to the business organization transfer and the supply expansion to global companies. Its efforts in the mobility business at a group level has begun producing results.
LG Innotek is believed to have achieved its first quarterly profit with its automotive camera business. Until now, LG Innotek's automotive camera business has focused on R&D and investments, and has not avoided losses.
The biggest contributor to the turnaround has been the growing number of new orders. LG Innotek is increasing its large-scale supply contracts with global electric automakers, major domestic automakers, as well as tier 1 automotive companies. In particular, the number of orders increased after emerging as a key camera supplier to major North American electric automakers. The automotive camera market is said to be significantly more profitable than smartphone cameras. Order volume is expected to increase as vehicles become electronic, and more cameras are mounted onto the vehicles.
LG Innotek's strategy to transfer the electric camera organization has also created synergy. LG Innotek's automotive camera business (vehicle CM) was transferred from the automotive parts division to the optical solution division earlier this year. This was to enhance business synergy and strengthen the automotive parts division's selection and focus.
Since the automotive camera business was transferred from the automotive parts division, which generates 1 trillion won in sales, to the optical solution business, which generates more than 10 trillion won in sales, they will be able to secure more abundant R&D personnel. By gathering all the camera-related businesses into one business unit, they will also be able to streamline the cost structure.
Business prospects are brighter for the second half of the year. According to industry insiders, LG Innotek is pursuing a large order for camera modules from a global autonomous vehicle company. If the deal is successful, the company is expected to keep turning a profit in the second half of the year.
LG Innotek's core North American trading company is developing fully autonomous vehicles. It is expected that there will be a significant increase in supply for automotive cameras.
By staff reporter So-ra Park (srpark@etnews.com)