Overseas subsidiaries prepare for the coming year by forecasting their respective market situations and projecting their sales performances.
Kim, Dong-chul, CEO of Doosan Infracore China
The Chinese government policy in 2005 was aimed at cooling off the overall economy, but DICC still managed to sell 6,086 excavators (including exports) to grab the top share of the local market. Our aggregate production from 1994 to last June broke the 25,000-unit mark, testimony to our leading position in China.
In the coming year, we have to pay attention to changes in sales volume and models in demand for each of China's main regions. Previously, we concentrated our marketing on the coastal area in the Southeast, but we must seek out new customers by focusing on underdeveloped markets in the Northeast and West. Along with China's massive urban construction, a major project is underway to divert water from the lower Yangtze River to the North. Thus demand for excavators is shifting from the medium-sized (20-ton) models to smaller as well as larger models. In step with this trend, DICC continues to improve quality and develop new models. Our consistent goal is to provide our products at affordable prices and raise customer satisfaction by constant improvement to after-sales service.
The Chinese government's development plan is expected to bring intensive competition to the market. However, we aim to sell 6,830 excavators, 1,800 forklift trucks and 390 machine tool products in 2006 for total sales of 3.7 billion (about US$460 million) in 2006 and will continue to work on expanding our market share.
Kim, Sang-kyu, CEO of Doosan Infracore Europe SA
DIEU reached its sales target of 270 million, thanks to the hard work of dealers and support of many loyal customers. We sold 3,000 pieces of construction equipment for the first time ever, and our target in the coming year is US$300 million.
For 2006, our main strategies will be focused on expanding market coverage and improving our capabilities to become a market leader. We will develop our network in markets where we already have a presence to provide complete regional coverage. At the same time, we will supplement our coverage of product and customer segments where our market share is relatively low. All internal competencies (marketing, sales, quality control, services) will also be strengthened so that we can carry out our strategies most effectively.
Intermat 2006, one of the world's "Big 3" heavy equipment shows, opens in France this year. It will be the first time for us to take part in a major exhibition in Europe under the Doosan brand and will be our first opportunity to introduce the new DX and DL series. As the show has such special significance for us, we will intensively promote the concepts of "Doosan's status today and tomorrow" and "the advent of next-generation products to lead the European market."
Kim, In-joong, CEO of Doosan Infracore America Corp
DIA achieved a noteworthy 30% increase in sales last year to US$360 million, and we were able to strengthen our market position accordingly. In 2006, the US economy is expected to grow about 3.3%, which would be slightly lower than in previous years. As a result, we expect our construction equipment, machine tool and forklift sales to grow at a slower pace in 2006 than we experienced last year. Our overall sales target has been set at US$430 million, which is 20% higher than the 2005 figure. We have also established some in-depth strategies for making the jump to global prominence.
First, we will expand our dealer network while strengthening our sales system and organization to maximize "organic" growth. In addition, careful studies will be conducted on quality issues, and directions will be established for improvements in the future. We will ensure the product and service competitiveness befitting a market leader.
Starting last year, DIA has expanded it's capability to supply parts while shortening the delivery time. The service force was augmented and trained as part of our ongoing efforts to enhance service competitiveness.
This year, we will enhance our operational processes and provide an upgraded training program. We will respond to diverse customer needs by securing a financing arm, launching various sales promotions, devising a better quality assurance policy, and implementing diversified PR campaigns and marketing strategies to familiarize the public with the Doosan brand as quickly as possible.
Ma, Seung-rok, CEO of Doosan Infracore Germany GmbH
The German market will see steady recovery in 2006, with special demand related to the World Cup, a business-friendly government policy and bold economic reforms. Besides these opportunity factors, are risk factors such as high oil prices, continued low growth, political unrest, and eroded price competitiveness from a weakening Yen. However, we have established the following strategies to overcome the adversity:
First, we are revamping our German dealer network and establishing a system of only one machine tool dealer per country in Europe. The opening of a Europe Operation Center for machine tools will result in more professional and faster customer support and after-sales services.
Superior quality and technology are the only way to prevail in Germany's construction equipment market. We will establish a solid platform under the "D55" banner to compete head to head with the biggest names in the business. Within five years, we aim to be selling 500 units per year.
The industrial vehicle market is showing signs of recovery in Germany. In step, we are engaging in a marketing program that is close to the customers and are bolstering customer services to expand sales.
For procurement, we are in synch with the Head Office's production and sales plans and will engage in ongoing activities for cutting costs and for shortening delivery response time. We will pursue global sourcing, focusing especially on the emerging market of Eastern Europe in the coming year. Procurement channels will be diversified and the groundwork will be laid for major cost reductions.
At the same time, we will take part in major trade shows to bolster Doosan brand promotion efforts. Advertising, digital multimedia broadcasts, and other aggressive marketing approaches are planned. We will also provide various incentive programs to our locally hired employees to enhance work skills and upgrade the workforce overall.
Lee, Sang-goo, CEO of Doosan Infracore South Africa Pty Ltd.
The South African market for heavy construction equipment reached 1,700 units last year, and our subsidiary held a 9% share of that market. We have averaged around 15% growth in annual sales since 2003, and we intend to increase our market penetration to 10% in 2006.
South Africa will host the soccer World Cup in 2010. Therefore, plans call for more stadiums, new roads near existing stadiums, new airports and more hotels. Work begins this year on a new subway that will connect downtown Johannesburg with the administrative capital of Pretoria. South Africa also has abundant minerals and metals, and rising international prices are expected to drive exports of gold and platinum. All these factors promise greater demand for heavy equipment of all kinds.
DIS plans to raise brand image and brand loyalty by promoting the Doosan name at local trade shows in 2006. Strategies have also been devised for handling the increase in dealers and expanding exports to neighboring countries.