Chairman Koo Cha-yeol of LS Group.

LS Group may pick up the electronic equipment for autos as its new growth engine through its affiliate Daesung Electric Co. Business sources said on Aug. 9 that the group plans to expand its overseas operation by growing its subsidiaries to six from three in the near future and hold an initial public offering.

The group has been making moves to turn to boost electric auto equipment in order to diversify its business portfolio from energy related areas.

The electric products maker, set up in 1973, has been turning out auto electric parts such as switches and ECUs (electric control units) for autos as one of the top firms in the sector in Korea, and its global shares of 4.3 percent and 12 percent, respectively. The company was taken over by LS Group in 2008 with LS Mtron holding a 100 percent stake in the company.

The electric equipment maker has subsidiaries in three foreign countries including Qingdao, China, and Tamil Nadu, India, among others.

After the company is listed on the stock market, it will set up another local subsidiary each in China and India and a local subsidiary in Mexico to market its products in the U.S. to step up its globalization strategy.

Officials of the electric products maker said the company got orders from overseas totaling over 1.6 trillion won with its first half sales and profit termed as the best in the company’s history for the period. The company plans to look for businesses in the new auto parts markets overseas and set up subsidiaries to build market shares in those new markets, they added.

Daesung Electric has not only been supplying its auto parts to domestic auto makers like Hyundai Motor and Kia motors, but also to auto makers abroad like Volkswagen, GM, Nissan, and Chrysler, among others.

The company offers switch products, including power window, in panel, general, encoder console, and combination switches, as well as steering wheel and rear armrest remote control, steering wheel haptic, inhibitor, lumino haptic, and touch screen products; PCB, plug-in, and module type relay products; and sensor products, such as steering angle, torque only, and yaw and G sensors, as well as current transducers. 

It also provides electronic module products comprising integrated memory and hands free systems, power tailgate ECUs, rear window heating timers, head lamp leveling devices, DC/DC converters, DC/AC inverters, rheostats, battery savers, ballasts, immobilizer systems, and multimedia interface products; glass, micro pole, and combination antennas; seat warmer, flasher, rear seat belt remind, central door lock, and chime bell units; power window control modules; and rear blow, folding INT wiper, glow, and steering column control units. 

In addition, the company offers MDPS, electric exhaust gas recirculation, EMB, and booster motor products; PCB type and smart junction boxes, remote keyless entry systems, integrated junction boxes, and conventional boxes; connection systems that include header and sealed connectors; and room lamp products, such as over head console, room, cargo, personal, and vanity lamps. 

Daesung Electric Co., Ltd. was founded in 1973 and is headquartered in Ansan, South Korea. Daesung Electric Co., Ltd. operates as a subsidiary of LS Mtron Ltd.

According to Strategy Analytics, the global market for auto parts expanded $230 billion last year and likely to reach $303.2 billion in 2020. Daesung Electric’s sales last year amounted to 808 billion won, expanding fast compared to 715.5 billion won in 2014 and 663.5 billion won in 2013.

A scene of Daesung Electric Co. plant in India.(Photos: LS Group)