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Samsung SDI boosts power clout for automotive space

Posted: 03 Mar 2015     Print Version  Bookmark and Share

Keywords:Magna Steyr  powertrain  Samsung SDI  battery module  EV 

With the goal of taking a larger control in the automotive market, Samsung SDI has announced its plan to acquire the battery pack business of Magna Steyr, an Austria-based operating unit of Magna International. The acquisition, which is expected to be completed in the first half of 2015, includes all 264 employees, production and development sites as well as the existing contracts of the business. Financial details of the deal are not disclosed.

Magna's move to divest its battery pack business is seen as "positive" by industry experts as the division was considered to be a "non-core business." Magna's battery capabilities were in battery module manufacturing, not in manufacturing battery cells. Magna stated that its intent is to focus on its "core propulsion competencies including engineering, drive trains and fuel systems." For Samsung SDI, which produces batteries for mobile phones, energy storage and automotive applications, experts feel that the deal will be favourable considering its diversified target market, which can generate a "reasonable return on investment" than an automotive supplier such as Magna.

The acquisition will help Samsung enhance its capabilities in developing batteries for electric cars and strengthen its position in the battery value chain for both modules and cells. By combining its expertise in battery cell and modules with Magna's know-how in assembling battery modules, the Korean company will enhance its profile as an advanced battery manufacturer and supplier in the alternate powertrain market. Samsung SDI expects batteries, targeted for automotive and consumer electronics, are going to be a major growth driver in near future. The company estimates that the global market for lithium-ion batteries will reach $32 billion by 2015, from $11 billion in 2010. IHS Hybrid-EV forecasts global lithium-ion production to reach 6.6 million units in 2020 from 1.07 million units in 2014.

The acquisition is likely to better position Samsung SDI in boosting its automotive clientele in Europe, North America and China. Samsung SDI is now working with BMW, which renewed its contract with Samsung SDI last year with plans to increase orders of EV battery cells by at least 20-30 per cent from its current levels in 2016. Samsung SDI has a contract to supply BMW's future models such as X5 PHEV, apart from its i3 EV and i8 PHEV. Ford also formed a partnership with Samsung SDI last year to build lightweight lithium-ion batteries.

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