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An artist's rendering of LG Electronics' Sri City plant in India. /Courtesy of LG Electronics

LG Electronics' third manufacturing plant in India, which broke ground last year, is expected to begin full-scale operations as early as the end of this month. The facility is poised to become a key global production hub for the company, serving not only India's rapidly growing home appliance market but also the automotive electronics sector, which LG has identified as a future growth engine.

According to Indian media outlet India Manufacturing Review on Friday, LG Electronics' Indian subsidiary is expected to begin operations at its new plant in Sri City, Andhra Pradesh, by the end of November or early December. Since entering the Indian market in 1997, LG Electronics has established factories in Noida in 1997 and Pune in 2006, before breaking ground on its third plant in Sri City in May last year. 

The Sri City plant, which involves a total investment of $600 million, covers a total floor area of 220,000 square meters and will produce air conditioners, refrigerators and washing machines. Initial production is targeted for this year. Once fully completed in 2029, the facility is expected to have an annual production capacity of 800,000 refrigerators, 850,000 washing machines and 1.5 million air conditioners.

LG previously projected that after the Sri City plant begins operations, its total annual home appliance production capacity in India would exceed 14 million units, including 2 million televisions, 3.6 million refrigerators, 3.75 million washing machines and 4.7 million air conditioners.

Market research firm Mordor Intelligence forecasts that India's home appliance market will grow from $51.68 billion last year to $71.85 billion by 2031, representing a compound annual growth rate of more than 5%.

"The Sri City plant will initially manufacture air conditioner compressors before expanding production to complete air conditioning units, strengthening the company's presence in southern India," India Manufacturing Review reported.

"The first production line will have an annual capacity of approximately 1.4 million air conditioner compressors, which could be expanded to more than 2 million units depending on demand."

The strategy appears aimed at increasing in-house production of key components during the initial phase of operations, thereby improving cost competitiveness and supply chain stability.

More notably, the Sri City plant is expected to serve as LG's entry point into India's business-to-business (B2B) automotive electronics market, expanding its role beyond business-to-consumer (B2C) home appliances.

Major Indian media outlets have recently reported that LG Electronics India plans to gradually establish dedicated production lines at Sri City for automotive electronics solutions, including in-vehicle infotainment, telematics and advanced driver assistance systems (ADAS).

In fact, LG Electronics India's board of directors approved a proposal to enter the automotive electronics business on Thursday. Although the company did not disclose a specific investment amount, it plans to proceed with investments in phases after obtaining shareholder approval, taking into account the scale of operations, technology and equipment requirements, and market conditions.

India is considered one of the world's three major emerging automotive markets, with local automakers accelerating their transition toward connected vehicles and electric vehicles (EVs).

LG Electronics aims to build on the trust it has established through its home appliance business in India as it expands into automotive electronics. The company hopes to gain an early lead in the market by supplying customized components to local automakers in a timely manner.

"The new plant is expected to become a strategic base that further consolidates LG's leading position in India's home appliance market while demonstrating its technological competitiveness in automotive electronics," an industry official said.

                                                                                                          Yeon Chan-mo