Kobelco restructures due to changing Chinese market

By Andy Brown24 June 2022

Kobelco’s SK210C excavator in action.

Japan-based OEM Kobelco Construction Machinery (KCM) has announced that it will integrate its Chinese production subsidiary into its manufacturing and sales subsidiary, so there is only one manufacturing plant of excavators in the country, in light of changing market conditions in China.

As part of the move of integrating the production subsidiary Hangzhou Kobelco Construction Machinery into Kobelco Construction Machinery (China), production capacity in China will be reduced from 10,500 units a year to 5,500 units a year.

Part of HKCM’s supply capacity for fabrication products will also be shifted to KCMC, with much of the remainder being shifted to a plant in India.

The Chinese market of hydraulic excavators has in recent years accounted for approximately 50% of worldwide demand but sales have been falling, and KCM said that competition from Chinese domestic manufacturers is becoming fiercer. The current market share of foreign-capital manufacturers has fallen to approximately 20% from around 50% in 2018, and sales prices have fallen.

KCM said that, outside of China, they expect demand for hydraulic excavators to remain steady in developed countries and grow in developing counties. The company plans to steadily increase sales of its hydraulic excavators by strengthening its local sales networks and expanding product models and specifications to meet market needs.

The changes in production are being made in stages and are expected to be completed in or around January 2023. 

MAGAZINE
NEWSLETTER
Delivered directly to your inbox, International Rental Newsletter features the pick of the breaking news stories, product launches, show reports and more from KHL's world-class editorial team.
Latest News
New Cat excavator ‘delivering on sustainability’
Cat 350 said to consume up to 13% less fuel than previous models 
EquipmentShare expands its US network
Colorado rental branch to partner with community organisations on apprenticeships
MBW appoints new COO
Jim Van Beek returns to company after a 15-year absence
CONNECT WITH THE TEAM
Murray Pollok Managing Editor Tel: +44(0)1505 850 043 E-mail: murray.pollok@khl.com
Simon Kelly Sales Manager Tel: +44 (0) 1892 786 223 E-mail: simon.kelly@khl.com
CONNECT WITH SOCIAL MEDIA