Experts say Google may prefer LG to larger parts makers
Published : 2014-02-09 19:58
Updated : 2014-02-09 19:58
LG Electronics has provided four high-speed battery chargers for Google’s electric vehicle plug-in charging stations in a bid to make headway in the automotive industry while strengthening its relationship with Google, industry sources said on Sunday.
LG said it did not manufacture the chargers, and that they were made by another domestic firm.
The deal appeared to have been discussed in detail in October 2013 when Google chairman Eric Schmidt visited LG Electronics’ Incheon campus, where LG’s automobile parts and components division is located.
For months prior, the two firms reportedly met on several occasions to talk about cooperating on Google’s smart cars.
The deal may now help the two IT giants, which already enjoy a partnership with the Nexus phones, to expand their partnership in the auto industry despite LG’s still-weak performance in the vehicle component areas.
“More cooperation can be possible as both are newcomers in the auto field,” said Shin Jung-kwan, an analyst of Seoul-based KB Investment & Securities. “Google, which is producing sample cars, may prefer LG to a large parts maker such as Continental AG, which mass-produces products,” he said.
Further, analysts said that Samsung, a top partner for Google that equips all of its smartphones with Google’s Android operating system, also may be prompted to increase its role in Google’s auto business given the partnership between LG and Google.
Samsung, which previously operated and then abandoned car-making with Renault Samsung Korea, has in recent years indicated it may once again enter the business. Remarks in this vein were made at the investor relations event Samsung held in 2013.
Meanwhile, Google and LG Electronics have shown significant interest in the smart car industry in recent years to follow the new trends toward convergence between cars and information.
In 2012, Google’s smart drive team announced that it completed over 300,000 autonomous-driving miles (500,000 kilometers) accident-free. This year, the company joined the Open Automotive Alliance with five other automobile and technology firms.
LG Electronics vice chairman Koo Bon-joon also has expressed his interest in smart car technologies. “We should make preparations for automotive components as cars are fast becoming smarter,” he said at the International CES 2014 early this year, after looking at smart car technologies displayed at the event.
In July 2013, Koo visited BMW’s headquarters in Germany, together with its affiliates’ executives, in a bid to promote LG’s auto parts for the German automaker.
LG Electronics has spent 310 billion won ($288 million) to build a hub of research and development on vehicle components in Incheon city. Since the campus was set up last July, it has acted as a control tower of other affiliates’ auto businesses including LG Innotek’s auto motors, LG Chem’s auto batteries, LG CNS’ charging solution and LG Hausys’ automotive materials.