Volvo Excavators Take on the World

Larry Stewart | September 28, 2010

Becoming an Excavator Exporter

Volvo Construction Equipment's president of Korean operations, Eric Nielson, told trade journalists gathered in Korea that the company had completed the "Volvo-ization" of the excavators and manufacturing plants the company bought from Samsung in 1998 for $500 million. The company has advanced its bid to become one of the top three players in the global construction-equipment market by bringing its excavator-assembly facility in Shanghai, China, online.

Nielson said the B Series excavators were the "first 100-percent Volvo excavators," although admitting that there are still some features of the original Samsung line.

Volvo's Korean operations passed into profitability in 2000. By 2002, Volvo excavator sales had climbed up over 6,300. Perhaps even more pertinent to Volvo's long-term goals, though, has been the successful recasting of the old Samsung business as an exporter. Between 1997 and 2002, the portion of Volvo's Korean-manufactured machines that are exported grew from 34 to 68 percent.

Volvo CE's goals include doubling the company's share of the global market for excavators larger than 11 tons by 2006. Nielson says current market share is 7 percent with the goal of 10 to 15 percent by 2006. (Note: Volvo CE does not participate in the Japanese excavator market, so the company doesn't include that significant market in their calculations or objectives).

Nielson says Volvo strategy includes adding larger excavator models (Changwon-plant officials let slip that 55-ton and 65-ton models are in the works), developing engineering centers in regions that demand significant volume of machines customized for that region, and "greater use of Volvo's global infrastructure."

"If we want to be considered by our customers to be in the top three global manufacturers of construction equipment, we cannot be content to be a fast follower."