Volvo Construction Equipment is moving production of its centre-post backhoe loader models to Mexico in a bid to reduce delivery lead times and currency risks.Volvo said it expects production of its BL60 and BL70 models, which are popular with customers in North and Latin America, to start by early 2009.

Currently made in Wroclaw, Poland, the move to a facility shared with Volvo Group company Volvo Bus in Tultitlán will "significantly reduce the lead times customers have to wait for the delivery of their machines," said the statement.

Initially, production at the Tultitlán facility, which is 40 km north of Mexico City, will consist of an assembly plant that uses components and subassemblies supplied in kit form from Poland. Long term, reliance on these kits and the use of "quality assured local suppliers" will be expanded.

Commenting on the move, Andy Knight, president of Volvo CE's compact equipment business, said, "Starting backhoe-loader production in Mexico opens up a great opportunity for [us] to get closer to [our] growing customer base with these market-specific products. As well as being well positioned in terms of access to both North and Latin American markets, the Mexican economy has also expanded rapidly in recent years and offers an attractive opportunity."

In addition to improving Volvo's "industrial footprint", the ability to both produce and supply in the predominantly dollar based construction equipment market of the Americas means that Volvo CE will reduce its exposure to exchange rate movements.

The Wroclaw factory will continue to produce backhoe loaders, concentrating on manufacturing Volvo's BL 61 and BL71 side-shift backhoe loaders, which are mainly sold in markets outside of the Americas.

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