[Weekender] Hyundai Rotem targets developing railway markets

South Korean train-maker Hyundai Rotem, owned by Hyundai Motor Group, is seeking to become a bigger global player by stepping up efforts to bring its railway vehicles and systems to developing markets overseas.

“Having established a presence in 35 countries, our core strategy is to use the positive reputation we have built up in the industry to enter new markets in countries with aging or no railway infrastructure in Central America and South America, such as Peru and Colombia,” said a Hyundai Rotem spokesperson.

Hyundai Rotem ― which currently supplies about 95 percent of railway cars used by the Korea Railroad Corporation and the Seoul Metropolitan Rapid Transit Corporation ― has established a presence in countries including Hong Kong, India, Brazil, Egypt, Ukraine, Turkey, the United States and others over the past decades.

“We are working to reduce production costs and supply high-quality railway vehicles at the best prices, in order to increase our competitive advantage against our global competitors,” the official said.

Despite such efforts, the firm was pushed into the red recently, recording an operating loss of 100 million won ($84,000) in the second quarter of this year.

Faced with fierce competition from China-based CNR Corporation, No. 1 in the industry in terms of sales, as well as traditional leaders including Bombardier, Alstrom and Siemens, the Korean railway vehicle manufacturer’s exports have been declining recently.

To revive its sluggish exports, Hyundai Rotem said it is looking to make inroads into countries with underdeveloped or aging railway infrastructures in South and Central America.

Since becoming the first ever Korean company to export railway vehicles overseas by sealing a deal to supply 30 gondola cars to Thailand in 1973, the company has been steadily expanding its exports to bring its railway vehicles across the globe.

In 1973, Hyundai Rotem began exporting its trains overseas for the first time by inking a deal to supply 104 cars to Hong Kong’s Mass Transit Railway company.

After making its first inroads into Brazil in 2003, Hyundai Rotem began to attract industry attention three years later when it introduced automated, driver-free rail vehicles for the first time on the San Paulo Metro Line 4.

Recognized for its advanced technology, the firm has managed to export a total of 654 trains to four train operators in three major cities in Brazil over the past 10 years, with its latest deal signed last December to supply around 136 trains to the Salvador Metro Line 2 for 300 billion won.

The company’s first overseas branch ― Hyundai Rotem USA ― opened its doors in Philadelphia in 2004, supplying trains to Pennsylvania, California, Florida, Massachusetts and Colorado. Hyundai Eurotem handles the firm’s European operations.

Just last year, Hyundai Rotem began exporting tram cars to Turkey for the first time. Demands for trams are forecast to grow in the years to come, as they are increasingly being considered as an eco-friendly alternative to today’s dominant public transit systems, the Hyundai subsidiary said.

Looking to rise up as one of the world’s leading manufacturers of rail and transit vehicles by 2020, Hyudai Rotem is planning to diversify its business portfolio by expanding its electrical and mechanical business, operation and maintenance services and railway parts sales.

The Korean company also plans to increase its market share in global markets by expanding research into developing new high-speed trains, eco-friendly vehicles and high-tech rail in the coming years.

By Sohn Ji-young (jys@heraldcorp.com)