HD Hyundai Group's construction equipment subsidiary has faced sluggishness due to a slowdown in the North American market, but it has shown resilience in emerging markets such as India and Brazil in the first half of this year. As demand for heavy machinery expands in Europe and Africa, expectations are rising that performance will rebound starting next year when HD Hyundai Construction Equipment and HD Hyundai Infracore merge.
According to industry sources on the 22nd, HD Hyundai Construction Equipment's sales in Africa and the Middle East, as well as in Southeast Asia, increased by 78% and 23%, respectively, compared to the previous year in the second quarter. Sales in Turkey and China also rose by 54% and 77%, respectively, compared to one year ago.
HD Hyundai Construction Equipment has secured orders for over 80 units, including wheel loaders, in Uzbekistan and Kazakhstan. It has sold its first 80-ton class ultra-large excavator to the United Arab Emirates (UAE) and has received a total of 557 orders in the Middle East. Previously, sales were concentrated in Europe and North America, but they have diversified their sales channels.
HD Hyundai Infracore will supply 39 units of equipment, including 20 and 50-ton class excavators and wheel loaders to the Philippines, and about 20 units, including 22-ton class equipment, to Ecuador. With various construction projects and mining developments planned in Uzbekistan, Azerbaijan, and Ethiopia, HD Hyundai Construction Equipment and HD Hyundai Infracore continue their marketing efforts.
An official from HD Hyundai Construction Equipment said, "The subsidiary is gradually targeting emerging markets rather than advanced markets dominated by global companies, and we expect a turnaround sooner than anticipated."
The two companies plan to re-launch as HD Construction Equipment starting January 1 of next year, and they expect significant performance improvements following the merger. Once combined, they will have a comprehensive lineup across all weight classes and will be able to leverage each other's sales channels.
In particular, an expansion of the small equipment business is expected. Compact loaders and other small equipment can be utilized on farms and construction sites, making them popular not only in Europe and North America but also in emerging markets. Last year, the two companies sold a total of over 9,000 small units, and they expect to increase that number to over 13,000 by 2027 and 22,000 by 2030.
HD Construction Equipment plans to secure its entire lineup of small excavators, skid steer loaders, and compact loaders by 2027. HD Hyundai Infracore has a total of eight types of small excavators in the 1 to 10-ton category, while HD Hyundai Construction Equipment sells 28 types. An official from HD Hyundai Infracore noted, "We will provide a variety of choices by securing a full lineup in the small equipment sector."
The engine business of HD Hyundai Infracore is also one of the key areas expected to drive the turnaround at HD Construction Equipment. After the merger, HD Construction Equipment plans to increase the ratio of its engines in use to 70-80%. By leveraging both the 'Hyundai' brand from HD Hyundai Construction Equipment and the 'Development' brand from HD Hyundai Infracore, they intend to increase the use of their own engines across an expanded product range.
HD Hyundai plans to expand the revenue of its engine division, which was 1.3 trillion won last year, to approximately 2 trillion won by 2027. In addition to tank engines for defense use, demand for high-profit products such as ultra-large power generation engines is also increasing. The two companies have set a goal to achieve sales of 750,000 units and 14.8 trillion won in revenue by 2030 through the merger.