Daedong-USA, Inc., which has led the North American market growth of "K-agricultural machinery," has hit successive snags on the ground.
As it engages in legal battles over an unexpected cybersecurity incident, the U.S. political push to legislate the "right to repair" is adding to uncertainty in the business environment, analysts said.
◇ Lawsuit escalates over personal data breach… urgent need to overhaul security systems
According to the agricultural machinery industry on the 22nd, Daedong-USA, Inc. is dealing with a personal information leak caused by a hacking incident. Earlier this month, the company officially said, "We confirmed that some information was leaked due to unauthorized external access in Oct. last year."
The leaked information reportedly includes names and contact details of tractor buyers and current and former employees, as well as copies of IDs and financial information. A former employee, identified as A, has filed a class-action lawsuit, citing the company's lax security management. A U.S. federal court has classified the case for mediation.
Daedong-USA, Inc. said, "We have retained an external forensic firm to investigate and have strengthened our security systems," but maintaining local brand trust and defusing legal risks have emerged as urgent tasks.
Along with internal security issues, the rapidly changing external policy environment also warrants close attention. With the U.S. midterm elections set for Nov., the "right to repair" in the agricultural machinery industry has emerged as a major political issue.
◇ The "right to repair" sweeping the U.S.… could it affect the revenue model?
The "right to repair" calls for guaranteeing farmers access to parts, manuals, and software so they can repair equipment themselves without relying on manufacturers' exclusive repair services.
While the measure is billed as reducing farmers' expense burdens, manufacturers face the prospect of lower parts sales and exposure of core technologies. The U.S. Federal Trade Commission (FTC) has already stepped up pressure by investigating industry leader John Deere.
In the third quarter last year, North America accounted for half of Daedong's total sales. With such high dependence—up 18% from a year earlier—changes in local regulations could directly affect Daedong's future earnings.
Korean agricultural machinery companies in the U.S. market, including Daedong and TYM Co., cannot help but be sensitive to policy shifts. TYM Co. posted consolidated sales of 224.1 billion won in the third quarter last year. At the time, TYM Co. cited growth in the North American market and increased sales of mid- to large-sized tractors as key drivers.
Following the cybersecurity incident, debate over the "right to repair" in the U.S. agricultural machinery sector is intersecting, which could weigh on overall security and service policies, analysts said.
An industry official said, "In 2023, Colorado became the first state where related legislation passed the state legislature, and it is now under discussion at the federal level," adding, "We will likely have to reassess not only local service systems and technical support methods but also parts of our business strategy."
A Daedong official said, "Since our initial entry into the U.S. market, we have not restricted repair authorization and have operated the provision of technical information and parts to enable reasonable repairs," adding, "We will maintain our stance on providing parts and manuals."