Volvo’s Reputation In Construction Machinery Segment Growing With New Products

Most people think of cars and trucks when they hear the name Volvo, but the company is also one of the larger and faster growing construction machinery suppliers in the world. Indeed, it can be compared to giant companies like Komatsu equipment, Caterpillar and Deere. Volvo’s construction equipment for sales.

That are expected to top $2 billion for the first time, versus sales of $1.9 billion and $1.2 billion. About 23 percent of those sales are generated in North America, while the largest portion of sales (about 60 percent of the total) comes from Europe.Volvo has always had an excellent reputation in the construction machinery industry. The company is managed from its headquarters in Brussels, Belgium, with production facilities in Brazil, Canada, France, Germany, Sweden and the U.S. The North American operations consist of Volvo Construction Equipment North America, Inc., located in Asheville, N.C., and Euclid-Hitachi Heavy Equipment, Inc., in Guelph, Ontario, and Cleveland, Ohio. Volvo Construction Equipment is responsible for the marketing and product support of the company’s business in the U.S., Canada and Mexico. Euclid-Hitachi oversees the development and manufacturing of rigid haulers produced in Canada.Volvo was known as VME. VME was formed, through the combination of the construction equipment divisions of both Clark Equipment and AB Volvo. Clark announced its intention to sell its entire interest in VME, so Volvo management reached an agreement to purchase Clark’s 50 percent interest for $573 million as part of its strategy to concentrate on the automotive and transportation industries. The company, renamed Volvo Construction Equipment, was consolidated June 30, 1995, at which time it became a wholly owned subsidiary of AB Volvo.Within the rigid hauler business, Volvo has a joint venture with Hitachi – Euclid-Hitachi – of which Volvo owns a 60 percent share. That venture was formed. The company also owns the German company, Zettelmeyer, which became a wholly owned subsidiary.Volvo acquired Groupe Pel-Job, a French manufacturer of mini-excavators for sale and a leading supplier of those machines in Europe.Volvo is the world’s leading supplier of articulated haulers, and it is a major producer of rigid haulers and wheel loaders. The company also produces hydraulic excavators – a product area it is planning to revamp completely during 1997 – and mini-excavators produced by its Pel-Job subsidiary.44 percent of the articulated dump trucks manufactured in the world rolled out of Volvo factories. It’s nearest competitor, Caterpillar equipment, accounted for about 25 percent of the market.The wheel loader product line has always been a mainstay for Volvo. Again, the company is a leader in this market, accounting for 10 percent of total industry production and sales annually. Caterpillar and Komatsu, the leaders in wheel loaders, together represent 40 percent of the world market, followed by Volvo in third position. In the North American market for wheel loaders, Volvo accounts for about 11 percent of the market.