Haier Automotive Business: Will LG’s Nightmare Return? A Shocking 3-Point Threat Analysis

The Chinese home appliance giant, Haier, is making a serious move into new territory: the automotive industry. This development is particularly noteworthy because it brings back memories of Haier’s past rivalry with LG Electronics, a company that is now betting its future on the automotive electronics components business.

As the industry shifts towards the Software-Defined Vehicle (SDV), the battle for dominance is increasingly fought over software and in-vehicle experiences. In this context, it’s crucial to objectively analyze the true capabilities and strategy of the Haier automotive business and understand what it means for established players like LG.

Haier’s Entry Strategy into the Automotive Industry

Haier’s approach is both methodical and patient. Instead of jumping into direct car manufacturing, it is focusing on smart solutions and key components, accumulating capabilities step by step.

Since 2017, Haier’s investments reveal a clear strategy:

• 2017: Entered the vehicle internet and controller space by investing in a cloud platform company (Feichi Magnate) and an electronics firm (Tongming Gaoke).
• 2020: Strengthened its software capabilities with consecutive investments in a smart connected car solutions provider (Pateo).
• 2022: Gained manufacturing insights by collaborating with SAIC and Chery on smart factory projects.
• 2024: Established ‘Katachi Auto Tech’ for its own R&D.
• 2025: Solidified its ultimate goal of a ‘car-home ecosystem’ through a strategic partnership with Changan Auto.

The core of Haier’s strategy is becoming an ‘ecosystem platform provider.’ They aim to extend their success in IoT and smart home technology (Haier Smart Home) to the automotive domain, effectively selling an ‘experience’ rather than just a ‘product.’ Their key assets include the industrial internet solution, COSMOPlat platform, and their already massive smart home ecosystem.

Analysis of Infotainment Software Capabilities

In the age of SDVs, where does Haier stand in terms of software?

• Strength: Platform Integration Experience
  Haier’s most significant advantage is its experience in unifying countless devices under a single platform. This ability to integrate and operate diverse software and hardware is a powerful asset in the complex automotive system.
• Weakness: Lack of Core Technology and Experience
  On the other hand, Haier has limited experience in developing its own operating systems, holds few core communication patents (like 5G/LTE), and lacks the semiconductor design capabilities that are the brains of infotainment systems. It currently relies on acquiring technology through investments in partners.

Technology Area	LG Electronics	Haier
OS/Software	Android dev experience, own webOS	Relies on partners, strong in platform integration
Connectivity	5G/LTE patents, mobile comms experience	Limited, mainly WiFi/IoT focused
Hardware Design	In-house chip & display production	Mainly assembly/integration, sources key parts
Ecosystem	Developing car-home solutions	Leverages existing massive smart home ecosystem
Manufacturing	Global production, quality control systems	China-centric, cost-competitive

Market Competitiveness and Potential Threats

When Haier enters the market, what will its advantages be, and how does this threaten LG?

• Cost Competitiveness: Ability to leverage China’s complete supply chain and achieve economies of scale.
• Market Access: Strong network with local Chinese auto brands.
• Ecosystem Integration: The unique ability to offer a ‘package deal’ that connects home appliances with the vehicle.
• Short-Term Threat (1-2 years): Haier could use its cost advantage to penetrate the low-to-mid-range market and pressure existing players by expanding cooperation with local Chinese OEMs.
• Mid-to-Long-Term Threat (3-5 years): By closing the technology gap through continuous investment and expanding globally alongside Chinese auto brands, Haier could disrupt the market with new service models (e.g., car-home subscription services).

Haier’s Clear Limitations and Challenges

Of course, Haier faces significant hurdles.

• Technological Gap: Core technologies like automotive-grade semiconductor design, real-time OS, Functional Safety (ISO 26262), and ADAS/autonomous driving algorithms are difficult to acquire in a short time.
• Quality and Reliability: The required quality and durability standards for automotive are on a different level from home appliances, demanding years of experience and validation.
• Market Entry Barriers: Breaking into the trusted, decades-old supply chain relationships that global automakers have with existing Tier 1 suppliers is an immense challenge.

Conclusion: The Beginning of a New Competitive Paradigm

Haier’s entry into the automotive electronics sector is a clear attempt to apply its successful home appliance formula to the car industry. Its weapons—cost competitiveness and ecosystem integration—are formidable, but the technological complexity and stringent quality demands of the auto industry present a challenge of a different magnitude.

While Haier’s current software capabilities are relatively weak compared to LG’s assets, its strong network in the Chinese market, cost advantages, and smart home ecosystem represent a significant long-term threat. In the era of the Software-Defined Vehicle, where platforms and services are key, proactive investment and innovation are more critical than ever.