This file photo provided by Hyundai Construction Equipment Co. on Oct. 20, 2021, shows a 22-ton excavator manufactured by the company.
SEOUL, Nov. 4 (Korea Bizwire) — South Korean construction equipment makers led by Hyundai Doosan Infracore Co. are seeking to expand their presence in emerging markets, such as South America, as part of efforts to tackle slow sales in their main Chinese market.
Hyundai Doosan Infracore and Hyundai Construction Equipment Co., the country’s leading excavator makers, saw their sales sharply fall in the Chinese market in the third quarter of the year, compared with the same period a year ago.
Hyundai Doosan Infracore posted 119 billion won (US$100 million) in sales in China in the July-September period, down 61.5 percent from a year ago.
Sales in the Chinese market accounted for 16 percent of its overall sales in the third quarter, down from 56 percent a year ago.
Hyundai Construction Equipment’s sales in China halved to 82.3 billion won in the third quarter from a year ago, while sales in its Chinese market accounted for 10 percent of its total construction equipment sales, down from 25 percent a year ago.
The decreased sales in China were blamed on a slowdown in the housing market of the world’s most populous country.
“Our sales in China have been on the decline from the second quarter of this year, due to a lack of new orders for construction, which was caused by the country’s tightened regulations on environment and safety,” Hyundai Doosan Infracore has said in its report on its third-quarter performance.
In a bid to overcome a slump in the Chinese market, Hyundai Doosan Infracore is considering focusing on the sale of lucrative large-scale excavators in China.
The decreased demand for construction equipment in China drove the construction makers to set their sights on emerging markets, including South America, the Middle East and Africa.
“Demand for construction machinery has been explosively growing on the back of a rise in prices of raw materials and pump-priming policies by governments in emerging markets,” Hyundai Doosan Infracore has said in the report.
This file photo provided by Hyundai Doosan Infracore Co. on Oct. 26, 2021, shows a 36-ton excavator made by the company.
Helped by efforts to diversify its sales network, Hyundai Doosan Infracore logged 1.22 trillion won in sales of construction equipment in domestic and emerging markets in the first nine months of the year, up 48.8 percent from a year ago.
Hyundai Construction Equipment’s sales of construction machinery rose nearly threefold in emerging markets in the same period, compared with a year earlier.
In the January-September period, the smaller affiliate of Hyundai Doosan Infracore sold 2,179 units of excavators and 659 units of forklifts in Brazil, Colombia, Chile and Argentina.
The company expects its sales in the region to reach about 4,100 units, including orders for 1,300 units of construction equipment at the end of the year.
A boom in sales in emerging markets, such as South America, offset Hyundai Construction Equipment’s losses in China in the July-September period.
The company recorded 33.2 billion won in net income in the quarter, up more than six times from a year ago.
Hit by weak sales in China, Hyundai Doosan Infracore’s third quarter net income was down 44 percent to 45.9 billion won compared with 82.1 billion won in the same period a year ago.
South Korea’s top construction equipment maker Hyundai Doosan Infracore, formerly known as Doosan Infracore Co., was taken over by global shipbuilding holding company Hyundai Heavy Industries Holdings Co. (HHIH) in August.
The two construction equipment manufacturers were affiliated with Hyundai Genuine Co., the subholding company of HHIH.
(Yonhap)
