Doosan Infracore's Excavator Sales Soar in China... A Boon for Q2 Earnings Defense

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[Asia Economy Reporter Ki-min Lee] Doosan Infracore's excavator sales in the Chinese market jumped by more than 20% last month.

According to the China Construction Machinery Association (CCMA) and the construction machinery industry on the 17th, Doosan Infracore sold a total of 1,320 excavators in the Chinese market in June this year. This is about a 23% increase compared to the same period last year (1,074 units).

Although Doosan Infracore's excavator sales in the Chinese market last month were significantly lower than the 2,166 units recorded in May this year, it performed well considering that the peak season for construction machinery had passed. The peak season for excavators in China is usually March and April, after winter ends and construction begins in earnest. After May, excavator sales tend to decline sharply.

However, this year, due to the impact of the novel coronavirus (COVID-19), China has implemented various infrastructure policies such as construction and building to stimulate the economy, resulting in higher excavator demand compared to previous years. Excavator sales in China from January to June this year reached 155,447 units, a 20% growth compared to 124,752 units during the same period last year. Doosan Infracore's cumulative excavator sales in China from January to June this year also recorded 10,728 units, an increase of more than 10% compared to last year.

The expansion of excavator demand in China is expected to act as a boon for Doosan Infracore's second-quarter performance this year. Doosan Infracore's sales proportion in China accounts for 40% on average, so the industry expects it to offset the sales slump in emerging markets such as North America and India, which have not overcome COVID-19.

Earlier, on the 6th of this month, Daishin Securities estimated Doosan Infracore's second-quarter sales and operating profit this year, excluding Doosan Bobcat, at 1.039 trillion KRW and 125 billion KRW, respectively. Compared to last year's second quarter sales of 1.018 trillion KRW and operating profit of 140 billion KRW, sales slightly increased while operating profit slightly decreased.

Additionally, Doosan Infracore reportedly maintained its position as the foreign company with the highest market share in the Chinese excavator market in June, following May this year. Previously, in May, Doosan Infracore recorded a 7.3% market share in the Chinese excavator market, including Chinese companies, surpassing the U.S. company Caterpillar (7.2%) by 0.1 percentage points as the top overseas company. To boost excavator sales in the Chinese market, Doosan Infracore is promoting products and supporting customers by utilizing social networking service (SNS) broadcasting platforms such as TikTok (?音, Douyin) and Kuaishou (快手, Kuaishou) locally.

However, Doosan Infracore's market share in the Chinese market last month was 6.1%, down 1.2 percentage points from 7.3% in May. Regarding this, a construction machinery industry official said, "Due to the recent trend of countries around the world supporting their domestic companies, the market share of foreign companies generally declined compared to last month," and added, "Since small excavator sales were also included in the tally, it is estimated that Doosan Infracore's market share, which focuses on large excavators, decreased."

This content was produced with the assistance of AI translation services.