Hyundai Mobis, LG Chem to form car-battery joint venture

Hyundai Mobis Co. and LG Chem Ltd. said Monday they have signed a final contract to set up a 40 billion won (US$33.8 million) joint venture to produce lithium-ion car batteries.

The venture by the two South Korean industry leaders, which will start production in the second half of next year, is expected to speed up efforts to boost their presence in the fast-growing market for eco-friendly cars.

The venture will be 51 percent owned by Hyundai Mobis, South Korea's largest auto-parts maker, with LG Chem, the nation's biggest chemicals maker, holding the remaining stake, the two companies said in a joint statement.

Hyundai Mobis and LG Chem will build a factory in the city of Uiwang, near Seoul, where the auto-parts maker has a plant for hybrid cars. The factory plans to produce battery packs for 200,000 vehicles a year, according to the statement.

In the statement, LG Chem Vice Chairman Kim Ban-seok said the venture would enable the two companies to have an upper hand in the global market for eco-friendly cars.

The global market for electric cars is forecast to expand to 12.93 million units a year in 2019, compared with a projection of 740,000 units for this year, according to industry data.

Hyundai Mobis is a unit of Hyundai Motor Co.

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