Volvo Construction Equipment has sold it 70% stake in SDLG, ending a 19-year partnership that allowed Volvo to offer a “value-based” selection of earthmoving equipment as well as a foothold in the China market. Construction Equipment evaluated the SDLG 948F wheel loader in 2017.
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The company cited “increasing competition” and will refocus its efforts in China to “offering Volvo-branded premium products and services to focused customer segments in China,” according to a press release. Those markets include mining, quarry & aggregates, and heavy infrastructure, it said.
The sales comes on the heels of Volvo announcing it was increasing production capacity for excavator and wheel loaders in Shippensburg, Pennsylvania. The production increase means more than half of North American supply will now be built in Pennsylvania.
“SDLG has served us well since 2006,” said Melker Jernberg, head of Volvo CE, in a statement. “However, with increasing competition, and the need to transform to new technologies as well as strengthen interaction with customers, we need to re-focus. China remains an important market for us, and we aim to capitalize on our opportunities by focusing on sustainable solutions in targeted segments. We also plan to leverage the excellent industrial system in China.”
SDLG-branded machines were distributed through Volvo’s North American dealerships, creating “a new dynamic in the marketplace,” Alan Quinn told Construction Equipment in 2017, when he was director of SDLG North America.
“With the advent of so-called ‘value-brand’ equipment in North America,” said Quinn, “the buyer now has more options to consider when choosing between new and used machines. These value brands are solid, well-made pieces of equipment, but lack [some] features of premium brands, thus helping keep the price low. Value brands have gained traction with buyers in seasonal or low-hour applications and with those involved in work that simply doesn’t require premium features.”
Volvo will “utilize its system in China as a production center” to serve both Chinese markets and export markets, according to the company. Volvo produces excavators in Shanghai, and “China will remain a crucial component” in its value chain, according to the company.
The shares have been sold to a fund “predominantly owned” by minority owner Lingong Group.
