LG Electronics unveils $7.6 billion investment plan to accelerate growth

Cho Joo-wan, chief executive officer of LG Electronics [Courtesy of LG Electronics]

LG Electronics Inc. vowed 10 trillion won ($7.6 billion) in new investments this year to overcome challenges with aggressive spending and merger and acquisitions.

Cho Joo-wan, chief executive officer of LG Electronics, shared the company’s plan for 2024 during a press conference at the Consumer Electronics Show in Las Vegas, the United States, on Wednesday. He emphasized the focus on “pushing through business limitations and accelerating qualitative growth.”

LG Electronics is set to double its investments compared to the previous year, with 4.5 trillion won allocated to research and development, 3.5 trillion won for facility investment, and 2 trillion won for capital investment, according to Cho.

Additionally, the tech giant will actively seek M&As and joint venture deals with the aim of achieving a revenue of 100 trillion won by 2030.

In terms of M&A targets, Cho highlighted business-to-business and emerging sectors.

“We will concentrate on areas where we lack capacity or need supplementation,” he said, indicating the likelihood of at least one or two outcomes within the current year.

Cho reiterated the company’s commitment to achieving the triple seven goal: 7 percent annual average growth, 7 percent operating margin, and a 7-times increase in corporate value. The primary areas of focus for fostering growth included B2B business, non-hardware, and emerging business.

Additionally, Cho declared the company’s continued commitment in automotive solutions. With its leading presence in vehicle infotainment (IVI), e-powertrain, and lamps, LG plans to continue investments to secure production capacity in regions such as Latin America and Europe, ensuring responses to new orders.

The heating, ventilation, and air conditioning (HVAC) business will also see expansion, with shifts in target markets to emerging regions, including Asia and Latin America, moving away from previous focuses in the European and North American markets. LG aims to offer diverse solutions and target over 40 trillion won in B2B business revenue by 2030.

The webOS business is another key area of focus for the company this year. LG plans to elevate the Linux-based smart TV operating system to a business generating trillions in revenue, leveraging synergies with existing businesses. As part of this move, LG is in discussions with Chinese companies to expand the webOS market.

Cho highlighted AI, robotics, and extended reality (XR) as key areas for emerging businesses. He unveiled the company’s plans to integrate AI into various business sectors, such as mobility, commerce, and virtual reality.

Regarding robots, Cho predicted a “clear future” within five years.

“Smart home AI agents can also be categorized as home appliances,” he said. “We plan to observe robot businesses over the next five years, while leaving the possibility open of equity investments or M&As.”