HD Hyundai Construction Equipment’s 40-ton excavator at the Neom City construction site in Saudi Arabia
South Korea’s leading construction machine makers are actively advancing into emerging markets such as India, Brazil, Mexico and Saudi Arabia, where demand for heavy machinery used in mining is rapidly increasing.
The move comes as their existing markets – North America and Europe – show signs of slowing after strong sales over the past couple of years.
According to industry data on Tuesday, HD Hyundai Construction Equipment Co., which ranks 23rd in the global construction machinery market, saw its Indian market share rise to 17.4% in the first quarter, up from 13.9% at the end of 2019.
Japan’s Hitachi Ltd., the No. 1 construction equipment maker in India, saw its market share decline to 20.8% from 30.2% over the same period.
HD Hyundai Construction Equipment, a unit of Korean shipbuilding and machinery conglomerate HD Hyundai Co., aims to overtake Hitachi by 2030.
HD Hyundai Infracore’s excavator
“Starting this year, we will sell 52-ton extra-large excavators in India,” said Chief Executive Choi Cheol-gon during his visit to the company’s Indian office earlier this month. “We aim to achieve a global operating profit margin in the 10% range through increased sales of high-value products.”
The company is also paying close attention to the Brazilian market, he said.
INFRACORE LOOKS TO MEXICO
HD Hyundai Infracore Co., another heavy machinery unit of HD Hyundai Co., is making efforts to enhance its presence in Mexico.
HD Hyundai Infracore, the world’s 19th-largest construction equipment maker, is set to launch a sales affiliate in Mexico this September to use the country as its hub for the Latin American market.
Products of Develon, HD Hyundai Infracore’s new brand, at Intermat 2024 (Courtesy of News1)
The company, which has focused on smaller excavators and wheel loaders, recently began active marketing for large-size excavators at private and government levels.
Infracore officials said they plan to raise the company’s Mexican market share from 8.5% in 2020 to 13% this year and 16% by 2028.
Doosan Bobcat Inc., the construction and agricultural machine unit of Doosan Group, said last November that it will spend 400 billion won ($294 million) to build a new production plant in Monterrey, the capital of the northeastern Mexican state of Nuevo León.
Bobcat, the world’s 11th-largest construction machinery maker, plans to increase its sales of excavators and other equipment in Brazil and the United Arab Emirates (UAE).
Currently, the North American market accounts for about 70% of its global sales.
TURN AWAY FROM CHINA
China has for years been one of the top markets for Korean companies. However, demand for construction equipment is slowing there due to the weak domestic construction market.
The Bobcat T7X, the world’s first all-electric compact track loader
Over the past couple of years, Korean companies turned their eyes to the US market, where the Inflation Reduction Act (IRA) provides tax breaks to foreign firms building plants in the region.
Following strong orders for construction equipment last year, however, demand is expected to slow in the coming years, industry officials said.
Demand for mine construction equipment and large construction machinery for raw material development has been on a steady rise in natural resource-rich Brazil, Chile, Mexico and other Latin American countries.
HD Hyundai’s two units – HD Hyundai Construction Equipment and HD Hyundai Infracore – are already the second largest players in the South American market for excavators and wheel loaders, following global leader Caterpillar Inc.
HD Hyundai said last month it aims to join the global top five by 2025.
Last December, the company said it was building an integrated equipment manufacturing platform for its two construction machinery units to cut costs and create business synergy.
In 2021, Hyundai acquired a controlling stake in Infracore from Doosan Group to pursue nonorganic growth. After the acquisition, it changed the company’s name to Hyundai Doosan Infracore and again relaunched as HD Hyundai Infracore with a new equipment brand name, Develon.
By Hyung-Kyu Kim
khk@hankyung.com
In-Soo Nam edited this article.
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