Doosan Bobcat, HD Hyundai Infracore seek growth in North America amid boom

Doosan Bobcat Inc.’s electric excavator. [Courtesy of Doosan Bobcat]

South Korean construction equipment manufacturers such as Doosan Bobcat Inc. and HD Hyundai Infracore Co. are eyeing North America for growth as the industry emerges as a promising market amid an industry boom.

According to multiple industry sources on Monday, Doosan Bobcat, Deere & Co., and Caterpillar Inc., the three largest construction equipment companies in the U.S., have all delivered surprise earnings in the second quarter this year.

Doosan Bobcat posted sales of $2.67 trillion won ($2 billion) in the April-June period, up 20 percent from the same period a year ago, and an operating profit of 466.5 billion won, up 51 percent.

The company beat consensus by 28 percent for operating profit. Deere & Co.’s sales increased by 30 percent to $17.4 billion and its operating profit by 46 percent to $3.9 billion during the same period.

Sales of Caterpillar jumped 22 percent to $17.3 billion and operating profit 89 percent to $3.6 billion.

The companies delivered remarkable results in terms of operating margins as well. Doosan Bobcat posted a record profit margin of 17.5 percent, Deere & Co. 19.7 percent, and Caterpillar 21.1 percent.

The strong performance was driven by a surge in construction projects as the U.S. Joe Biden administration introduced a massive infrastructure spending program.

The Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA), and the CHIPS Act, which came into effect last year, allocated $2.06 trillion in government spending for roads, railroads, airports, public transit, electric vehicle charging stations, and manufacturing plant incentives.

According to market research firm Blueweave Consulting Pvt Ltd., the U.S. construction equipment market is expected to grow by an annual average of 6 percent to $40 billion in 2028.

“Demand for bulldozers and excavators is strong, and supply is not keeping up with demand,” said Chung Ji-hye, team lead at the Korea Trade-Investment Promotion Agency Chicago. “Backlogs are prominent, and new orders for construction equipment continue to surge.”

The construction industry is also benefiting from rising housing demand, which is boosting homebuilding projects, and stricter safety regulations that have increased demand for building maintenance.

More than 10 million homes are expected to be built in the U.S. by 2030, according to market data tracker IndexBox Inc.

The recent strong performance of construction equipment companies is not just a result of government policies but also of steady technological innovation.

Doosan Bobcat launched the world’s first electric excavator and will launch a hydrogen fuel cell forklift later this year.

Deere & Co., dubbed the Tesla of agricultural machinery, presented a blueprint for an unmanned farming system that combines traditional farm equipment with software at the Consumer Electronics Show (CES) in Las Vegas early this year, with a goal of making it a reality by 2030.

The Korean construction equipment companies such as HD Hyundai Infracore and HD Hyundai Construction Equipment Co. which had been focusing on the Chinese market, are stepping up their efforts to target the U.S. market.

HD Hyundai Infracore saw its construction equipment sales in North America and Europe gain 41 percent on year in the second quarter.