LG Electronics will halt production at its manufacturing plant in Huizhou, China, after October, bringing operations at the group's first manufacturing subsidiary in China to an end after 34 years.

According to industry sources on July 21, LG Electronics plans to cease operations on the production lines at LG Electronics Huizhou (LGEHZ) by the end of the year. The company has already informed local employees that manufacturing will stop after October.

The Huizhou facility has primarily produced speakers for LG Electronics' XBOOM audio brand. The company is understood to have decided to reorganize its manufacturing footprint as competition from Chinese manufacturers intensifies and its audio business shifts toward premium products.

LGEHZ was established in October 1993 as a joint venture among LG Electronics, LG Electronics China and TCL Group, becoming the LG Group's first manufacturing subsidiary in China. LG Electronics currently owns an 80% stake in the venture.

The Huizhou factory began operations in October 1994, producing home theater systems, Blu-ray DVD players, smart printers and beauty devices. More than 90% of its output was exported, primarily to North America, Latin America, Europe and Central Asia.

The plant has an annual audio production capacity of 2.6 million units and annual production value exceeding 2 billion yuan. Profitability has declined over the past three years, with net profit falling from 12.5 billion won in 2023 to 10.9 billion won in 2024 and 9.2 billion won in 2025.

"We plan to close the Huizhou plant this year and have already informed local employees that production will stop after October," a person involved in LG Electronics' China operations said.

The company has not yet finalized how it will handle the legal entity or the factory after production ends.

"Production at the Huizhou subsidiary is scheduled to stop by October this year," an LG Electronics spokesperson said. "We are reviewing various options for the future operation of the subsidiary and the factory."

Possible options include transferring production to LG Electronics' manufacturing base in Hai Phong, Vietnam, expanding contract manufacturing with Chinese partners, or liquidating the subsidiary.

LG Electronics previously liquidated its Kunshan manufacturing subsidiary in China in 2020, transferring automotive infotainment production to its Hai Phong plant. The Kunshan facility had produced automotive audio, video, navigation and telematics products.

LG Group operates the LG Hai Phong Campus in Vietnam, which houses manufacturing facilities for LG Electronics, LG Display and LG Innotek. Hai Phong has become one of the group's key overseas manufacturing hubs.

LG Electronics Vietnam Hai Phong (LGEVH) reported consolidated revenue of 5.97 trillion won in 2025, up 5.9% from 5.64 trillion won in 2024. Net profit increased 17.8% to 204.9 billion won from 173.9 billion won. LGEVH is the company's second-largest overseas manufacturing subsidiary by revenue, after its US subsidiary.

LG Electronics could also outsource production previously handled at Huizhou to Chinese manufacturers. The company already uses a joint development and manufacturing model for some entry-level refrigerators, washing machines and robot vacuum cleaners, with Chinese partners responsible for product development and manufacturing while LG Electronics oversees product planning and quality standards.

Depending on product positioning and target markets, the company could shift Huizhou production to external manufacturing partners.

Another possibility is the complete liquidation of the Huizhou subsidiary without relocating production. LG Electronics previously shut down and liquidated its Tianjin subsidiary, which manufactured kitchen appliance components, after the need to maintain local production diminished amid growing competition from lower-cost Chinese brands.

Industry sources said the closure reflects a manufacturing efficiency strategy rather than a retreat from the audio business.

LG Electronics has been expanding its premium audio lineup, particularly premium speakers and soundbars, while targeting annual audio business revenue in the trillions of won over the longer term. Market research firms forecast the global consumer audio market will grow from $58.1 billion in 2024 to $70.1 billion in 2029, driven in part by new product categories such as AI-powered speakers.