LG Electronics to localize North American HVAC business

The International Air-Conditioning Heating Refrigerating Exposition 2024 (AHR Expo 2024) [Courtesy of LG Electronics]

LG Electronics Inc. is accelerating the establishment of a localized system in its heating, ventilation, and air conditioning (HVAC) business in North America spanning from R&D to sales and maintenance, which could potentially be expanded into the company’s European markets.

According to LG Electronics on Sunday, the company is gearing up for HVAC solutions production tailored for the North American market at its U.S. factory in Huntsville, Alabama. It also said during Thursday’s earnings conference call that the company is exploring new production sites across the United States to bolster its North American HVAC operations.

The Huntsville factory, the first overseas production facility built by a South Korean company in 1982, was previously used by the electronics maker for solar panel production. LG Electronics intends to produce air solution products there, poised to localize an entirely integrated system for the HVAC business in the North American region.

The company opened an air solution research lab in Alpharetta, Georgia, in 2020, and a heat pump research center in Alaska recently, as well as establishing a Mexican subsidiary for Hi-M.Solutek Co., its subsidiary specialized in system air conditioner maintenance, in 2022. With this move, the company aims to establish a system to handle everything from product R&D to production and maintenance in North America.

The company’s localization strategy focuses on delivering products tailored to local environments, energy needs, and design standards, ensuring a swift response to demand. “The HVAC business requires products that vary greatly based on each country’s climate and living conditions,” an official from the company said, citing a comprehensive localization strategy from R&D to maintenance as “crucial” for global HVAC competitiveness.

LG Electronics is also embarking on the establishment of a localized integrated system for its HVAC business in Europe, expecting rapid growth in this sector. It has a plan to establish a heat pump research center in Germany within 2024 and its Hi-M.Solutek already established a local subsidiary in the country at the end of 2023.

The Korean company is also mulling measures to create a specialized heat pump industry cluster focused on cold regions in cooperation with key universities in the Nordic region, aiming at developing core technologies for next-generation heat pumps suitable for these regional environments.