S.Korea's Hyundai Genuine opens parts distribution center in Jakarta

Hyundai Construction Equipment Co., the machinery parts-making subsidiary of South Korea's Hyundai Genuine, on Wednesday said it recently opened a parts distribution center (PDC) that it built in Jakarta, Indonesia.

The PDC is a logistical base that secures and supplies parts for construction machinery such as excavators and wheel loaders and usually operates in main target markets of Hyundai Construction like the US, China, Belgium and Brazil. The center in Jakarta is the company's ninth overseas.

The PDC in Indonesia handles 9,000 types of parts, so the procurement period is expected to be slashed from five days to two. The delivery cycle for regular parts orders will also be done twice a month instead of once.

Hyundai Construction will also boost financial support to expand its sales in Indonesia.

The company last month formed a strategic business partnership with KB Capital and launched a low-interest installment financing product in Indonesia for purchasing construction equipment.

Another subsidiary, Hyundai Doosan Infracore Co., will also open a sales company in Jakarta late this month in Jakarta and begin forming a business network to target the Indonesian market.

In May, the company will open its own PDC to set up a cooperation system for parts supply with Hyundai Construction Equipment. And in September, it will take part in the project Mining Indonesia along with Indonesian construction equipment and excavation companies to introduce Hyundai Doosan Infracore's new brand Develon.

Hyundai Genuine said this strategy is based on Indonesia's marketability.

From 2010 through last year, the Indonesian market saw an average of over 9,000 pieces of construction machinery sold per year, with annual sales of 15,000 units expected over the next five years.

"Asia is expected to emerge as a new competitive field for the construction machinery sector given its abundant population and resources," a Hyundai Genuine source said. "Indonesia is an outpost within the continent that we must secure to penetrate the Asian market."

Write to Seo-Woo Jang at suwu@hankyung.com