Korea’s tractor and farm machinery maker envisions smart mobility firm

Daedong Industrial Co., South Korea’s leading tractor and farm machinery maker, aims to transform into a smart mobility company, applying autonomous driving and Internet of Things (IoT) technologies to its mechanized farming equipment.

It is working to gain ground in North America, the world’s largest agricultural machinery market, dominated by bigger rivals such as Deere & Co., which makes farming machines under the brand of John Deere, and Japan's Kubota Tractor Corp.

“Farming is an industry with huge growth potential that can enhance productivity by taking advantage of the technology brought by the Fourth Industrial Revolution,” said Won Yu-hyeon, co-president and co-chief executive officer of Daedong Industrial, in a recent interview.

“Daedong is not just a manufacturer. We’re now shifting our business focus to the smart mobility industry, which harnesses state-of-the-art technologies such as autonomous driving, GPS and IoT,” he said.

RECORD SALES AMID PANDEMIC

The US-educated co-CEO, who previously worked at Korea’s telecom giant KT Corp., took the helm at Daedong in late 2019.

Headquartered in the city of Daegu, southeast of Seoul, Daedong was also hit by the fallout of the COVID-19 pandemic, which disrupted the global supply chain, forcing competitors like Deere to stop production amid short component supply.

But the Korean company was able to secure enough inventory in advance, delivering ordered products without delay, Won said.

The company posted a record revenue of 492 billion won ($423 million) in the first half of this year on a consolidated basis, with its operating profit rising 27.4% to 42.8 billion won from a year earlier. The handsome growth was led by Daedong USA, its US subsidiary, whose sales revenue increased 25% year on year to 199.9 billion won.

TARGETING NICHE MARKET IN US

Won said the company is targeting a niche market of 20-30 horsepower compact tractors to expand its share in the North American market.

“We plan to raise our market share in the US to over 20% from the current 16% through aggressive marketing promotions and financial assistance,” he said.

Won said the company also plans to increase its presence in the European market by strengthening its dealership networks in Germany, France and the UK.

Founded in 1947, Daedong Industrial makes tractors, combines, power tillers and lawn mowers as well as engines, cylinder heads and blocks for agricultural machinery. In overseas markets, its products are sold under the KIOTI brand.

“Our immediate goal is to make smart farming equipment. But in the long run, we will manufacture all kinds of special-purpose vehicles with smart technology,” said the co-CEO.

Write to Ki-Yeol Seo at philos@hankyung.com