South Korea’s tech giant Samsung Electronics Co. that is going all-out to promote the automotive business as one of its next-generation growth engines has reportedly asked the government to provide support for its efforts to expand the newly added business.

An unnamed senior government official recently said a group of executives from Samsung Electronics in charge of auto components business recently met with key government officials to seek support for its automotive business. The official noted that executives emphasized the importance of the government’s support for it to successfully push forward with the company’s new automotive business.

According to foreign media outlets last week, Samsung Electronics was rumored to be in talks to buy the auto components unit of Italy’s Fiat Chrysler Automobiles N.V. (FCA) to expedite its efforts to make a foray into the automotive industry. For Samsung Electronics that is relatively a new comer in the auto components industry, it has not been easy to compete with other auto parts markers that have already built a broad network based on their extensive years of experience in the area. When automakers choose suppliers for new components, they generally sign contracts with those that have been producing certain components for at least four to five years and those that have a track record of supplying them to other automakers for safety reasons. But the Korean tech giant has only established its own automotive application business team late last year, leaving it with less than one year experience.

Another government official who asked to be unnamed said that what Samsung Electronics wanted from the government was the government’s help for the company to supply its components to the country’s automakers. Gaining credibility in the local auto industry is expected to help the tech company allure global automakers later. LG Electronics Inc., now a leading supplier of core electric vehicle auto components, has also expanded its business by supplying parts to local automakers before reaching out to global companies.

Samsung Electronics, meanwhile, has emphasized that any government’s support should not be considered a favor to a certain large conglomerate as a majority of its auto components are produced in partnership with multiple small- and mid-sized companies.

By Lee Seung-hoon

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]