In December 2022, Chris Jeong was named CEO of Doosan Infracore North America (now DEVELON). His predecessor, Edward Song, was promoted to Head of Global Sales for HD Hyundai Infracore. Todd Roecker is the Vice President of Growth Initiatives for DEVELON in North America.
Equipment Today editors sat down with Jeong, Song and Roecker at CONEXPO-CON/AGG 2023 in Las Vegas to discuss market segments, technology, its rebranding efforts and how DEVELON is taking on the North American market.
Equipment Today: With the new brand, it's going be very exciting to unveil here at CONEXPO. What are your growth goals more specifically for North America than globally?
Chris Jeong: In North America, we are currently ranked seventh. Our vision is to be in the Top 5 in North America by 2025.
Edward Song: Top 5 for heavy, by using our core product segment and expanding into new product categories.
Equipment Today: How do you improve the compact segment? Is that through new product development? Is it acquisition? What can you tell us?
Jeong: It could be organic and inorganic, but at the moment, we are pretty much focused on organic growth. We extended our lineup of mini excavators and the [compact track loader]. This meant, despite a very short period of R&D time, did a great job to launch the first [DEVELON] CTL. We have a roadmap to launch additional product ranges in the CTL segment. On top of that, we know there are other [products], like dozers. We made a significant effort to launch our first dozer in the North American market. This kind of market-appropriate product offering is one of the key strategies to improve our position in North America.
Equipment Today: Talk a little bit about electrification. How do you see developing growth in that market segment of sustainability, battery technology, anything in that realm?
Jeong: Like other OEMs, we're very keen about this technology and want to make the technology sustainable. Take for example our first electric mini excavator, the DX20ZE-7. We have a development plan to extend mini excavators, the electrification technology by 25 in that range, and on top of that, [an] additional plan is in place for the mid-side excavators and wheel loaders as well.
Equipment Today: So mid-size, how do you characterize what that is?
Jeong: The priority at the moment is our 14- to 20-metric-ton excavators. And the wheel loader could be two cubic meters to convert to fit to 2.2 cubic yards. We also have a good start on hydrogen fuel technologies that we intend to leverage.
Equipment Today: Are there any particular market segments that you see as particularly attractive and beneficial to help you with North American growth? For instance, is your rental strategy going to change? Is it going to increase distribution? Is that currently an issue that is in flux, because you've been with the Hyundai relationship, how is distribution being set up?
Song: The channel network will be independent. We’re keeping the brand separate. From the beginning when the acquisition group announced, we communicated our plan of independent brands with independent management and independent distribution, we will let the market decide.
Of course, from the sourcing side, R&D side, there will be some differentiation around the commercial marketing channel, but I think by keeping it that way, there will be one plus one.
Equipment Today: So, has distribution changed at all for that one, or have you been able to maintain the dealers that you have?
Song: From 2018-2022, I was the CEO for North America during that time. Todd is the vice president of growth, which oversees the dealer development. We saw one of the most important drivers for this market is to cultivate new dealers’ bigger capability in terms of financial stability; plus, that financial stability we need because we want to provide better services. So, we’ve intentionally put more effort and investment to work with our incumbent dealers for them to invest as well as to attract from outside. So that has been going on very well. Our coverage has increased. Our dealers’ caliber has been changing. We are continuously having a stronger dealer network, and I think we are becoming an even more attractive OEM for others to come to the businesses.
Equipment Today: In your value proposition to the end user, to the contractor, what is your No. 1 message you want to get across to that contractor for the value proposition that your products bring to them? Is it reliability? Is it innovation? Is it that you want to grow with them, that you’ll be there for them with parts and service through your distribution network? What’s the key message you’d like to communicate to them?
Song: Providing a reliable solution has definitely been our key messages so far. And we are trying to improve the aftermarket [parts] side as well. So, I guess that will also mean that it will be a good solution provider for you to be profitable for your business. That that’s the kind of message that we’ve been consistent.
Todd Roecker: To expand on that, I would say with the new product offerings allows us to be more of a single-source provider to our dealers and to their customers. So, the contractors don't have to go to multiple partners. DEVELON can be that one-source provider, making it easier to do business with people that they trust and a product that they trust in helping them be more profitable.
Equipment Today: How is the rebranding effort going, and what has some of the market response been to the name change?
Jeong: Our dealers are very excited about this change. I mean, change isn’t always comfortable with everybody, but we're not just changing the brand. Actually, we introduced so many new technologies and new products because our brand name DEVELON was developed with combining the two words “develop” and “onward.” It means that we continue to develop and introduce innovative, progressive and forward-looking technologies and solutions.
Equipment Today: I did see the new technology that you're focused on. Is it readily available for a contractor to go ahead and implement, or is this an exhibit of what is to come, something new? Basically, can I buy it today and run it?
Song: Not at this moment. On the commercial side as well as the technology side, we can offer the package originally announced; it will be close to 2025.
Jeong: The technology is changing so rapidly, but at the same time, customers’ demands are evolving as well. We introduced this technology back in [November] 2019 [in South Korea]. Since then, the customers demand expectation is even higher than we expected. So, we try to incorporate more advanced features in the machine such as adapting or adopting automation and safety functionality and so on. So that's why we've tried to make this plan to commercialize a little bit more realistic, probably possibly maybe some time later, maybe 2028.
Roecker: Though all the products shown may not be available today, there are certain aspects of the technology that are available today on our products, but not as a finished fully autonomous [solution].
Equipment Today: So, your customers, what are they demanding? How are they pushing you to develop your product? Are they demanding more electrification? Are they demanding energy transition solutions? Maybe you're going to have some hybrid machines. What are the customers that you're working with demanding?
Jeong: While sustainability will be the main area, the machine’s functionality and operator skill will also be important. That's why OEMs are working very hard to come up with the machine guidance control. These technologies are a core aspect that many customers and dealers are looking at so, we are also in working on it, potentially in cooperation with other OEMs like Trimble.
Equipment Today: Do you offer any customer training? Do you have a Customer Training Center?
Roecker: Well, we have what we call The ROC, an operation center in Tucson, where we tend to have one of every product. Customers can go through the hands-on experience through their dealers. If it’s an end-user, we try to keep the dealer engaged in that relationship. So, we have them both come down there. But basically, The ROC is a sales and training tool to improve that relationship with their customer and DEVELON. It continues to be one of our best sales tools.
Equipment Today: How large is that facility?
Roecker: 40 acres.
Equipment Today: Is the ROC an acronym for anything?
Roecker: Real Operation Center.
Equipment Today: As a follow-up to the question on making it to Top 5 globally 2025. What percentage does North American sales revenue represent in that picture?
Song: The revenue last year for just North America was close to 20%. Previously, much of the focus was on the Chinese market, but we have shifted our efforts to North America.
