HD Hyundai Construction Equipment is seeking a new source of revenue in the Southeast Asian market through an equipment rebuilding business.

According to the industry on the 10th, HD Hyundai Construction Equipment began its equipment rebuilding business by delivering an 80-ton excavator to a customer in Indonesia in Jul. Rebuilding is a business that purchases used equipment whose warranty period has expired, repairs it or replaces key parts with new ones, and then resells it. HD Hyundai Construction Equipment's India subsidiary sold 66 rebuilding (restoration·rebuilding) units last year alone.

HD Hyundai Construction Equipment delivers the first unit of its used-equipment regeneration project to a customer in Indonesia. /Courtesy of HD Hyundai Construction Equipment

The price of a product restored to near-new condition is about 60% of a new unit. There is also an assessment that products that had lost their value are traded again in the market, contributing to resource circulation.

The market for used construction equipment is most active in Southeast Asia. An industry official said, "Unlike the United States and Europe, which use new equipment, emerging countries often buy equipment used in Europe and use it as secondhand."

Construction equipment company Caterpillar operates the Cat Reman program, providing customers who return core parts with remanufactured parts at low prices. The products Caterpillar purchases and recycles each year reach 60 million kg.

Global construction equipment company Volvo also runs a used equipment rebuilding certification program called "Volvo Certified Rebuild," providing services that inspect, restore, and resell used products whose warranty period has expired.

Doosan Bobcat operates a parts center in the United States to expand its aftermarket market. At the 2023 Atlanta parts center opening ceremony, Mike Ballweber (Mike Ballweber·left), head of Doosan Bobcat North America, and Fabio Duque, vice president of APL Logistics, which manages the parts center, attend. /Courtesy of Doosan Bobcat

Doosan Bobcat is generating a considerable amount of sales in the aftermarket (After Market·post-sale market). Of last year's total sales of 8.6 trillion won, the aftermarket business handling parts and attachments (auxiliary equipment) accounted for about 17% (about 1.46 trillion won). It is the second-largest figure after sales of its core small equipment (53%). Industrial vehicles and agricultural/landscaping equipment contributed 16% and 9% to revenue, respectively. Doosan Bobcat aims to achieve 2 trillion won in sales from the aftermarket by 2027.

An HD Hyundai Construction Equipment official said, "The equipment rebuilding business is a strategic business that can expand AM (aftermarket) revenue by securing a new customer base in the used market," adding, "We plan to continue expanding it gradually." The official added, "It is also highly meaningful from the perspective of ESG management, which improves the efficiency of resource utilization."

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