Volvo Construction Equipment will stop manufacturing graders and backhoe loaders under its own brand in Europe and the Americas. The products will be transferred to SDLG, its Chinese joint venture, and will be manufactured and marketed under this brand.
Volvo currently builds graders in Shippensburg, US and Pederneiras, Brazil, while backhoe loaders are manufactured in Pederneiras and Wroclaw, Poland. Ceasing European production of backhoe loaders will result in the closure of Volvo CE’s operations in Wroclaw, and Volvo expects to cut 1,000 jobs across these three sites due to this change and other efficiency enhancements.
A company statement said, “The current product lines of technologically advanced and high-spec Volvo-branded backhoe loaders and motor graders have addressed a relatively small premium segment of the market. SDLG-branded backhoe loaders and motor graders will better serve customer demands in the large and growing value segment of the market.”
The move is part of a programme within the company to cut structural costs by SEK 3.5 billion (US$ 475 million). It comes after a strategic review which looked at the profitability of individual products.