Published : 2013-10-06 19:35
Updated : 2013-10-06 19:35
A recent visit by BMW China executives to LG Chem added to the growing speculation that LG is in last-minute talks for winning a battery supply deal from the German carmaker.
A delegation from the BMW Chinese operations paid a visit to the LG headquarters in Seoul on Sept. 26, according to sources, to discuss the auto parts business with officials from the chemical firm.
“BMW China officials visited to review chemical materials used for vehicle parts,” said one LG Chem official.
Vehicle frame parts and bumper ABS are some of the materials produced by LG Chem, along with batteries for electric cars. General Motors, Ford, Volvo and Renault are some of the company’s clients. But the firm has yet to supply to a more upscale crowd.
“LG seems to ratchet up its efforts to secure more deals with car makers in the premium car market,” said one market watcher, declining to be identified.
LG Chem recently was considered a runner up for supplying batteries to Tesla Motors, an up-and-coming U.S. electric car maker that’s been garnering more popularity. But the deal is expected to go to Samsung SDI.
Another reason BMW officials may have chosen LG as a destination was to explore possible collaboration with LG Electronics, which now has an auto arm of its own.
LG Electronics in July added a vehicle components business division and operates an R&D center in charge of developing vehicle parts including motors, inverters and converters for electric vehicles.
The conglomerate had been preparing for quite a long while to launch the division, based on the belief that it must widen its horizons. So far, it had maintained a low profile for fear of stimulating the dominant carmaker here, Hyundai Motor Group, which stands as a key client for LG.
In July, The Korea Herald reported on plans of key LG Group executives including LG Electronics’ chief Koo Bon-joon and others from all LG affiliates involved in carmaking ― LG Chem, LG Innotek, LG Hausys and LG Display ― to sit down with BMW in Munich during a suppliers event hosted by LG.
The scene was similar to how Samsung SDI clinched a deal with BMW after heir-apparent Lee Jay-yong sat down for talks. SDI is now the sole provider of lithium-ion batteries for BMW’s first electric car, the i3, and also supplies to Volkswagen, Chrysler and Mahindra & Mahindra.