LG Electronics to boost supply at Mexico, US plants after August 1

LG Electronics to boost supply at Mexico, US plants after August 1

LG Electronics has announced plans to increase production at its facilities in Mexico and the United States, effective August 1, 2025. This move follows a decline in net income and operating profit during the second quarter of the year, as reported by the company. The decision to ramp up production comes amid global market softness, increased tariff burdens, and intense competition.

During the second quarter, LG Electronics' net income declined to 609.7 billion Korean won from 629.5 billion Korean won the previous year. Operating income dropped to 639.4 billion Korean won compared to 1.20 trillion Korean won in the prior year. Sales for the quarter were 20.73 trillion Korean won, down from 21.69 trillion Korean won in the same period last year [1].

The company cited global market softness, increased tariff burdens due to changes in U.S. trade policy, and intensified competition as the primary reasons for the decline. However, LG Electronics noted that its Home Appliance Solution, Vehicle Solution, and Eco Solution Companies delivered strong performance, each posting year-over-year increases in both revenue and operating profit.

To mitigate the impact of these challenges, LG Electronics is taking proactive steps to enhance its supply chain. The increased production at its Mexico and U.S. plants is expected to bolster its operational efficiency and help meet growing demand. This strategic move is part of the company's broader effort to adapt to changing market conditions and maintain its competitive edge.

Investors and financial professionals are advised to monitor LG Electronics' future earnings reports and market performance to assess the effectiveness of these supply chain adjustments. The company's ability to navigate global market challenges and leverage its strong product divisions will be key indicators of its financial health.

References:
[1] https://www.nasdaq.com/articles/lg-electronics-q2-net-income-declines