Samsung Electronics and LG Electronics have been competing in various market segments for many years, including the smartphone niche where Samsung and LG occupy the top two market positions in South Korea. Needless to say the rivalry between the two tech giants goes beyond mobile devices and into product categories including consumer electronics and home appliances. In the recent years, both Samsung and LG have gained an increased interest in the automotive market too, and while both companies seem to aim at achieving similar goals of becoming respectable auto part suppliers, their strategies are very different.
Over the past several weeks, stories regarding Samsung Electronics’ plans for the automotive market have reached the headlines more often than usual, but that’s not to say that LG Electronics sits idly by. LG Electronics has been involved in the automotive market since the year 2013 when it acquired auto parts designer V-ENS and established its Vehicle Component (LG VC) division, and furthermore, LG Electronics’ portfolio shows that the company has been involved in the industry even before LG VC became a reality. The company ran an in-vehicle infotainment business unit in the Energy Component and Home Entertainment Divisions, and even manufactured compressors, motors for electric vehicles and more. But evidently, LG Electronics has more ambitious plans for the auto part business and LG’s Vehicle Component division is expected to record sales revenues of 3 trillion Korean Won ($2.74 billion) throughout the year 2016, representing a year-on-year sales increase rate of roughly 50%. Additionally, reports suggest that LG VC is currently working on qualitative growth rather than quantitative growth, and is conducting year-round recruitment. At the end of Q1 2016, LG VC had 3,625 employees, greatly surpassing the number of employees Samsung Electronics has for the automotive market. Nevertheless, industry watchers are apparently keeping a close eye on Samsung Electronics, seeing how the tech giant is taking a very different route compared to LG Electronics, and indeed LG VC. Samsung’s strategy appears to rely more on aggressive mergers and acquisitions, as last month the company has announced an equity investment of roughly $450 million in Chinese electric car manufacturer BYD, and fresh rumors claim that Samsung Electronics could also acquire Fiat’s car part business Magneti Marelli.
LG Electronics and Samsung Electronics seem to apply different strategies in other market areas aside from the automotive business, such as the home appliance and home electronics industries. Samsung Electronics recently acquired luxury kitchen appliance designer Dacor, as well as IoT and cloud computing brands such as Sigfox, SmartThings, and Joyent. On the other side of the camp, LG Electronics’ strategy led to the creation of two new brands, including “LG Signature” which creates state-of-the-art consumer electronics, and “Signature Kitchen Suite” which provides luxury kitchen appliances.