Goodbye South Korea, hello Vietnam: LG suspends smartphone production in South Korea
Business is not going well for LG. The company may be continuing to release a slew of smartphones including the V40 ThinQ and G8 ThinQ, but its smartphone business has made losses for seven consecutive quarters, or almost two years. There are no signs that LG is planning to mothball its smartphone business, although it is reportedly making some fundamental changes to operations to minimise these losses.
According to the South Korean-based Yonhap News Agency, LG will shift smartphone production from its Pyeongtaek factory in the south of Seoul to Hai Phong in northern Vietnam by the end of the year. The company will also move around 750 workers from Pyeongtaek to its home appliance plant in Changwon. The South Korean manufacturer has smartphone production plants in Brazil, China and India too, but it produces between 10 and 20% of its smartphones in its home country. LG has also made the following statement:
The plan is a strategic move to improve the profitability of its smartphone business amid a slump in the global smartphone market and increased demand for home appliance products, such as air purifiers and dryers.
LG currently has around a 3% global smartphone market share and sits behind Samsung, Huawei, Apple, Xiaomi, Oppo and Vivo according to research conducted by Counterpoint Research. Bleak times indeed.