HD Hyundai taps RCE to go global with used heavy machinery

HD Hyundai Construction Equipment Co., the construction machinery provider under South Korean shipbuilding conglomerate HD Hyundai Group, will venture into the overseas used heavy machinery and equipment market with local startup RCE Co.

HD Hyundai Construction on Wednesday signed an agreement with RCE to join hands to sell secondhand construction machinery and equipment in Vietnam, according to the two companies.

RCE, founded in 2016, is a Korean startup operating a global online marketplace, where sellers and buyers directly trade construction machinery and equipment without brokers at discounted prices.

Using the startup’s platform, the Korean heavy machinery supplier will start selling used construction machinery and equipment in Vietnam, where the pre-owned construction machinery market is growing at a 7% compound annual growth rate (CAGR).

The annual sales volume of excavators in the Southeast Asian country stands at 14,000 units, of which about 13,000 units are used.

“We will actively seek to advance into the global used heavy machinery and equipment market with our experience in Vietnam,” said HD Hyundai Construction Chief Executive Officer Choi Cheol-gon.

He forecast that the global market, estimated at about 400 trillion won ($310.3 billion), will grow at a 3% CAGR.

CONGLOMERATE-STARTUP COLLABO TO GO GLOBAL

Under the deal, HD Hyundai Construction will supply its Korean distributors’ pre-owned excavators, parts and services to RCE to sell them in Vietnam via its platform.

RCE will also offer warranty, maintenance and customer management services.

The two partners plan to build a training center to nurture construction machinery engineers and eventually provide loans for machinery purchases.

RCE earned 4.5 billion won in annual sales within two years of its inroads into Vietnam and logged 10 billion won in sales last year. 

It is designated as a promising unicorn by the Korean government. It raised about 5 billion won in a series A funding round.

The company started operating a cross-border direct trading platform for secondhand heavy machinery and equipment seven years ago as the first such entity in the world, the startup said.

The Korean startup sells original and genuine equipment from Korea, Japan and China via its platform.

It does not have intermediaries and warehouses, reducing the prices of products sold on its marketplace, the company explained.

Using RCE’s platform and customers’ database, the Korean heavy machinery player hopes to build a fair construction equipment retail market in Vietnam, it said.

HD Hyundai Construction is a heavy equipment-producing subsidiary of HD Hyundai XiteSolution, a sub-holding company that serves as the control tower for HD Hyundai Group's heavy equipment business, including HD Hyundai Infracore Co.

Write to Mi-Sun Kang at misunny@hankyung.com

Sookyung Seo edited this article.