As the adjustment period continues in major construction machinery markets such as North America and Europe, domestic construction machinery corporations have embarked on diversifying their revenue. They are reconfiguring their operations by investing in other sectors or developing new products in search of a breakthrough amid the recession.
According to FnGuide, the revenue and operating profit forecasts for HD Hyundai Infrastructure Core for last year were 4.1197 trillion won and 236.9 billion won, respectively. This represents a decrease of 11.59% and 43.36% compared to 2023. The revenue for HD Hyundai Construction Equipment last year is expected to be 3.5077 trillion won, down 0.25%, with operating profit projected to drop 22.25% to 200 billion won.
This year, the atmosphere in the construction machinery market is expected to be similar to last year, while HD Hyundai Infrastructure Core has decided to expand its factory in Gunsan, Jeollabuk-do, to manufacture large engines and battery packs for commercial vehicles. Similar to how it reduced dependence on China in 2020 and shifted its focus to advanced markets and India and Brazil to improve performance, the goal is to secure new growth drivers. A spokesperson for HD Hyundai Infrastructure Core noted, “During the oil crisis in 1979, Hyundai Heavy Industries pioneered new markets by producing high-value-added ships. We are increasing our main product lines to respond to the crisis.”
The decision to expand the new factory is also due to the production capacity. The production capability for K2 tank engines is less than 10 units per month. HD Hyundai Infrastructure Core is also manufacturing engines for the K2 tank (initial contract) that Hyundai Rotem will supply to Poland, as well as engines for next-generation tanks from Turkish defense contractor BMC. A representative of HD Hyundai Infrastructure Core stated, “The tank engines already have competitiveness, and the operating profit is steadily increasing. We will expand our revenue further.”
HD Hyundai Infrastructure Core is also focused on securing new customer segments in the North American market. Together with HD Hyundai Construction Equipment, it plans to more aggressively target the North American market this year through the ‘HD Hyundai Customization Center’ established in Georgia, USA. This center assembles and completes products produced in Korea according to U.S. customer specifications and delivers them locally. A representative of HD Hyundai Construction Equipment noted, “We emphasize that assembling products locally allows for cost savings.”
According to FnGuide, the expected operating profit for Doosan Bobcat last year was 826.2 billion won, a decrease of 40% compared to the previous year. Securities analysts believe that while Doosan Bobcat will show improvement compared to last year, it is unlikely to reach the operating profit of 1.3899 trillion won in 2023. Doosan Bobcat is reportedly planning aggressive sales efforts in the North American market to expand sales volumes.