LG Electronics' automotive parts division is finally emerging from a long tunnel of losses after 13 years.
The most recent sign of this turnaround was the record-breaking first-quarter 2026 results. The Vehicle component Solutions (VS) division posted its highest-ever quarterly revenue and profit, achieving an operating profit margin of over 6% for the first time. This confirms that its profitability is becoming stable and structural, not just a one-time event.
So, what's driving this significant change? There are three key factors. First, the division has a massive order backlog of around 100 trillion KRW, which secures future revenue for years to come. Second, its product strategy is proving resilient. Even as the pure EV market slows, automakers are shifting to hybrids, which still require the premium in-vehicle infotainment (IVI) systems and cockpit electronics that are LG's specialty. This decouples LG's growth from the volatile EV-only market. Third, years of strategic investment in global production are now paying off. New factories in Mexico and Hungary are ramping up, allowing LG to produce closer to its customers, reduce tariff impacts, and lower logistics costs—all of which directly improve profit margins.
This success is a core part of LG's bigger strategic shift from a consumer-focused company to a B2B powerhouse. The VS division is no longer just a source of revenue growth; it's becoming a second reliable B2B profit engine, standing alongside the highly successful home appliance business. The company's B2B revenue share has already reached 36%.
In essence, the VS division's recent performance is not a temporary fluke driven by a hot market. Instead, it's the result of a well-executed, long-term strategy involving smart product choices, secured orders, and an optimized global manufacturing footprint that is finally bearing fruit.
- Glossary -
- In-Vehicle Infotainment (IVI): A system in a vehicle that provides a combination of entertainment, information, and navigation to the driver and passengers, typically through a digital display.
- Order Backlog: The total value of confirmed customer orders that have not yet been fulfilled or delivered. A large backlog indicates stable future revenue.
- Operating Profit Margin (OPM): A profitability ratio that measures how much profit a company makes from its core business operations, calculated as operating profit divided by revenue.