Installing turbo engine to refrigerator Forecastes to enter global top 5 in
Herald Economy=Ryu Jung-Il reporter］ Elegant design, environment-friendly turbo engine, front/rear-wheel drive electronic hydraulic differential gear, automatic 4WD brake, 10 hydraulic port based power shuttle, electronic hydraulic control, horizontal control device… it is not a specification of a newly released car. It is the major functions of tractors manufactured by 30 years of technological capability of LS Mtron.
LS Mtron’s tractor business is flying sky-high. Tractor business division revenue was only 159.3 billion won in 2008, but it grew upto 175.9 billion won in the following year, and achieved 51% growth to 264.1 billion won in 2010. Growth continued in 2011 with revenue of 303.0 billion won by doubling in 3 years since its establishment.
In particular, exports nearly tripled from 42.9 billion won in 2008 to 133.1 billion won last year. When operation of foreign branches such as US, China, and Brazil stabilizes, 2015 total revenue is expected to grow upto 1 trillion won to become a global top 5 tractor manufacturer.
LS Mtron authority said that “although Jeonju factory is in full operation, foreign buyers are on the waiting list to receive tractors” and “The annual Korean market size is just 20,000 units and 500.0 billion won, but the world tractor market is 1 million units with 40 trillion won. Its popularity is increasing due to aggressive penetration of overseas market and competitiveness product quality”.
LS Mtron established Brazil foreign branch this year and plans to target the South America market aggressively next year. In 2010, the tractor factory was completed in Qingtao, China to secure a foothold to penetrate the Chinese market of more than 200,000 units. Also it established tractor foreign branch in the US, and signed a 200 million dollars supply contract to CNH (subsidiary of Fiat, Italy).
Changes of overseas market conditions are utilized as well. While preoccupying emerging markets such as China and India, the averaged low pricing has risen to 70% level of Korean prices, and the market continues to expand due to government’s agricultural mechanization subsidy support policies. As engine gas emission environment regulations become stronger in North American and Europe, LS Mtron’s environment-friendly turbo engine with 30% fuel cost saving effect has a great competitiveness.
LS Mtron’s Tractor Business Director, Executive Vice President, Lee Gwang-Won, said that “we plan to aggressively expand to European market such as France, Germany, and more” And “we will secure 2 more foreign strongholds other than China within 2 years”.
Of course, the product competitiveness is a key to penetrating overseas market. From functionality standpoint, performance conforming to passenger car was implemented, and amenities, such as air conditioner, refrigerator, and audio were installed. In convenience perspective of being able to change into 48 different working equipments, such as rotavator (plowing field), trailer (cart), plow, grass mower, snowplow, and more, the price up to 160 ㅎmillion won is not considered as a big burden.