South Korea's LG plans to set up a $1 billion joint venture with Magna to produce electric car parts

South Korea's LG Electronics announced on Wednesday that it has agreed to invest $1 billion with auto parts giant Magna International to form a joint venture to produce electric car parts at factories in South Korea and China.

Magna said in an exchange filing that it would buy 49 per cent of the new subsidiary for 501.6 billion won ($453 million) and the rest would be held by LG Electronics.

It is reported that the joint venture, tentatively named LG Magna Electronic Power Systems (LGMagnae-Powertrain), will produce electric motors, inverters and vehicle chargers. The joint venture will start production in the second quarter of next year and will set up a software research and development center in Troy, Michigan, where Magna's US headquarters are located.

According to public data, Magna, which was listed in 1962, is a diversified automobile supplier and the only company in the field of automobile suppliers that can provide vehicle OEM services. The company designs, develops, manufactures automotive systems, assemblies, modules and components, and designs and assembles complete vehicles, mainly sold to (OEM) automotive and light truck mainframe plants in North America, Europe, Asia, South America and Africa.

In China, Magna has established joint ventures with Huayu and BAIC.

On November 1, Magna (a joint venture between Magna and Warwick Motors announced in 2017) successfully mass-produced its high-voltage drive system assembly in Shanghai and shipped it to Europe for the first time.

On May 11, the unveiling ceremony of BAIC Magna high-end smart manufacturing base was held, which was established by BAIC and Magna joint venture company. In June 2018, BAIC and Magna reached an agreement to jointly build an open and shared R & D and manufacturing center for high-end intelligent pure electric vehicles. In January 2019, Magna Weilan New Energy vehicle Technology (Zhenjiang) Co., Ltd., which represents the joint venture between the two sides, was officially unveiled, and the construction of Magna Weilan New Energy vehicle Test Center was launched by Synchronize. In December 2019, BAIC Langu Magna Automobile Co., Ltd., which represents the manufacturing joint venture, was officially registered.