LG Electronics (LG) Chief Executive Officer Lyu Jae-cheol has outlined the company’s management direction and strategic priorities, as the global technology leader sharpens its focus on sustainable growth, innovation and profitability.
Speaking on the company’s outlook, Lyu said LG is operating in a rapidly evolving business environment where industry boundaries, competitive dynamics and technological cycles are changing faster than ever before.
“The paradigms of industries and competition are shifting at unprecedented speed. Simply keeping pace is no longer enough. To stay competitive, we must clearly understand the ecosystem, move faster than others and execute better,” he said.
Strengthening Core Competitiveness and Technology Leadership
LG plans to reinforce its fundamental competitiveness by raising performance standards across its entire value chain while widening its technology lead over competitors.
This strategy is anchored on two key areas:
- Excellence in Quality, Cost and Delivery (QCD)
- Strong technology and R&D leadership that delivers long-term competitive advantage
To drive these improvements, LG has established an Innovation Drive Division reporting directly to the CEO. The division will act as a central coordination hub to accelerate transformation across product development, manufacturing, supply chain and sales. Lyu will personally oversee progress and key performance milestones.
In research and development, LG will continue to focus investment on what it calls “Winning Tech”, comprising technologies selected for their customer value, commercial potential and technological strength. These innovations will be scaled to lead markets, particularly in high-growth areas, through expanded partnerships with leading global players.
Shifting to a High-Performance Business Portfolio
LG is accelerating its transition toward a high-performance business portfolio centred on growth, profitability and resilience to economic cycles.
Key growth areas include:
- B2B businesses, such as vehicle solutions and heating, ventilation and air conditioning (HVAC)
- Non-hardware businesses, including product and service subscriptions and the webOS smart platform
- Online and direct-to-consumer (D2C) channels
These businesses now account for nearly half of LG’s global revenue and approximately 90 percent of operating profit, up significantly from just a few years ago. The company plans to further accelerate this shift through continued investment and business model innovation.
The vehicle solutions business is expected to post its strongest performance to date this year, driven by growing demand for components used in software-defined and AI-defined vehicles. Meanwhile, LG’s HVAC business is positioning itself for future growth through cooling solutions for AI-powered data centres, an area of increasing relevance as digital infrastructure expands across Africa.
LG’s smart factory solutions business has also recorded strong global demand, while non-hardware offerings such as product subscriptions and the webOS platform continue to grow at double-digit rates, now serving hundreds of millions of devices worldwide.
Leveraging AI to Drive Profitable Growth
Artificial intelligence is playing a central role in LG’s next phase of growth through what the company calls AI Transformation (AX).
Unlike traditional digital transformation, AX integrates processes end-to-end, enabling faster, data-driven and more autonomous decision-making. LG aims to improve overall productivity by 30 percent within the next two to three years, allowing employees to focus on higher-value innovation and expertise.
AI is already being applied across product development, sales, supply chain management and marketing. LG’s internal AI platform, LGenie, is evolving into a company-wide AI agent powered by LG AI Research’s EXAONE foundation model and integrated with leading global AI technologies.
Increasing Investment for the Future
Despite global economic uncertainty, LG plans to increase investment in future growth areas while maintaining disciplined resource allocation.
The total investment, including capital expenditure, software and IT, intellectual property and strategic partnerships, is expected to rise by more than 40 percent year-on-year. Part of this funding will be supported by proceeds from the planned IPO of LG Electronics India.
Investment will focus on areas where LG has strong competitive advantages, including AI-powered homes, smart factory solutions, AI data centre cooling and robotics. The company will also continue to pursue strategic partnerships to strengthen capabilities and unlock new growth opportunities across emerging and developed markets.
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