LG Electronics will step up its efforts to strengthen its automobile component business, as General Motors’ new electric car Bolt is expected to go on sale later this year, a brokerage said in its report Wednesday.

SK Securities said LG’s vehicle components division is expected to post 1.4 trillion won in the latter half of this year -- a more than 40 percent increase from the previous year. The division already fared well in the first half, by posting 1.2 trillion won ($1 billion) in sales, a 48 percent growth on-year.


“General Motors is expected to launch the new Bolt in the second half and LG Electronics is expected to mass produce auto parts (for GM) in the third quarter,” said Park Hyung-woo, an analyst from SK Securities.

“If the electric car Bolt gets the spotlight again in the market, it will (positively) apply to the share prices of the main part supplier LG Electronics,” he added.

LG Electronics is set to provide 11 key parts including the drive motor, inverter and battery pack to Bolt from August, and the supply volume is expected to steadily grow to peak in 2017.

“Since the set-up of the vehicle components division, we have invested up to 400 billion won every year and a similar volume of investment will be made in the future,” Park Kyung-reol, an executive from LG Electronics’ vehicle components division, said in a recent conference call.

LG’s vehicle components division has seen double-digit growth every year since the company first published its earnings last year. The business posted 382 billion won in sales in the first quarter of 2015 and continued to grow to 639 billion won in the second quarter of this year.

By Shin Ji-hye (shinjh@heraldcorp.com)