Hyundai Rotem has landed a deal to supply trains worth about 1 trillion won to Australia. The contract is the largest single deal the company has won in its history.
With the signing of the latest deal, the aggregate of the orders Hyundai Rotem has so far won stood at 2.618 trillion won, surpassing the past’s record high of 2.543 trillion won.
Hyundai Rotem said on Aug. 18 it signed a contract to supply 412 double-decker trains to the transportation ministry of the Australian state of New South Wales with an option of an additional 136 trains.
If the option is counted, the value of the latest contract will add up to 1.1 trillion won, the highest-ever. It goes beyond the past’s record high worth about 1 trillion won involving a project to supply 636 trains to the Delhi Metro Line No. 3 with an option of another 150 trains.
It is the first time that Hyundai Rotem has entered the Austrian train market. The company will supply trains replacing outworn ones now in operation in nearby cities such as Sydney, Hunter, New Castle and Blue Mountain. Initial sets of trains will be delivered by 2019, and the remaining deliveries will be completed by 2022.
Hyundai Rotem won the latest deal by outbidding its rival companies from such countries as France, Switzerland and China. The Korean company’s strategies to differentiate itself from its rivals paid off. Hyundai Rotem had already completed the design of the trains before the outcome of the bidding was revealed. Hyundai Rotem teaming up with the Australian heavy industries company-UGL, a consortium partner, played a part in winning the deal.
Hyundai Rotem promised that the trains will reduce travel time by half an hour and also improve energy efficiency by 13 percent compared to the conventional trains now in operation. Hyundai Rotem won orders to supply double-decker trains in Korea in the past, but the deal with Australia is the first one overseas, a Hyundai Rotem official said.
With the winning of the latest deal, Hyundai Rotem said it will aggressively explore the overseas double-decker train markets.
Hyundai Rotem ended up winning an aggregate of 577.4 billion won last year, which was an equivalent of 37 percent of the previous year’s achievements. The company suffered 192.8 billion won in losses last year.
Due to worsening business conditions, the company implemented a voluntary retirement incentive program last year. Entering this year, however, things have changed for the better.
The turnaround has come after the company came up with a plan to innovate management, calling for a ban on dumping prices and strengthening competitiveness. The company has since enforced stern risk management measures while inducing organic collaboration in such areas as sales and purchase and research sectors.
Hyundai Rotem has won five major contractions in Korea and abroad so far this year. They are a 530 billion won train project in Manila; a train supply contract for Busan Subway Line No. 1; a train repair project in Wellington, New Zealand; a train supply project in Istanbul, Turkey; and an unmanned train contract in Malaysia.
Hyundai Rotem is expected to win additional contracts in the second half, said business sources, adding that the company will post business performances surpassing the past’s achievements.
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Hyundai Rottem signed a deal to supply trains to replace outworn ones now in operation in such cities as New Castle and blue Mountain in New South Wales, Australia. (Photos: Hyundai Rottem)
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