Monday, June 16th, 2014
SEOUL, KOREA - LG Chem is set to move into the Chinese electric car market in earnest. The company said on June 15 that it signed agreements with SAIC Motor Corp. Ltd. and Qoros Automotive, the two major auto manufacturers in Chinese, to supply car batteries. An LG Chem official said, "We are not free to divulge information on model names and contract amount right now." But the official did say that the batteries are for SAIC Motor's plug-in hybrid electric vehicles and Qoros' plug-in hybrid vehicles.
With the latest contracts, LG Chem could secure a total of four Chinese car makers, including FAW Group and Chang'an Motors, as its electric battery customers. In terms of unit of sales last year, SAIC Motor, FAW Group, and Chang'an Motors were ranked first, third, and fifth in the Chinese market respectively. The combined sales number of these three auto makers was 10.24 million last year, accounting for almost 60 percent of the market (17.93 million).
Qoros Automotive is a Chinese-Israeli automotive manufacturing company, with a rapidly rising demand from the European market. Already, LG Chem has won orders of more than 100,000 batteries from the four Chinese companies, valuing more than several 100 billion won. The company will soon establish a joint venture with a local partner while recently announcing the location for a plant for battery packs and cells.
Kwon Young-soo, LG Chem president in charge of the battery business, said, "In order to respond to the rising demand, we have to establish a production base in China. To that end, we will create a new joint venture by the second half." Market research firm IHS predicted that the eco-friendly vehicle market in China will increase almost 20 times to 655,000 units by 2020 from 33,000 last year.