KOMATSU TO OUTSOURCE CABS TO VOLVO

Komatsu Ltd. and Volvo Construction Equipment (Volvo CE) have now reached a basic agreement for cooperation on production and development of construction equipment components as a result of discussions both companies have engaged in since last autumn.

As a first step, Komatsu and Volvo have signed a letter of intent for the production of Komatsu designed wheel loader cabs at Volvo CE's cab plant in Hallsberg, Sweden. The cabs, currently outsourced, will be for four models of Komatsu's small wheel loaders, produced in Europe and North America.

Production is scheduled to start at the beginning of 2003 after the finalization of specific conditions.

With the outsourcing of production to Volvo CE, Komatsu will be able to expect a reduction in costs. This commercially based agreement will provide Volvo CE with increased operating efficiencies at its Hallsberg plant.

The agreement is part of the ongoing cooperation discussions between Komatsu and Volvo CE. Discussions in progress include collaboration in the supply and development of drivelines, except engines. Conclusion of these discussions is expected to take place this autumn and announcements on these and other potential ventures will be made as basic agreements are reached.

Mr. Masahiro Sakane, President of Komatsu, and Mr. Tony Helsham, President & CEO of Volvo CE, state: "The cab venture is an initial step in our commitment to reinforce cost competitiveness, further improve quality & technology and increase customer satisfaction. It shows how a "win-win" situation can be achieved."

Discussions between Komatsu and Volvo CE regarding cooperation in the production and development of construction equipment components was first announced in November 2001. In the discussions, Volvo CE and Komatsu will not include cooperation in sales, service, distribution and equity participation. Both companies will continue to engage in business as independent competitors using their own dealer networks, brands and product identities.

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Last updated:2002/04/04 09:15

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