Volvo CE Transfers Backhoe Loaders and Motor Graders Manufacture to SDLG

January 9, 2015

Jean L.

Volvo says that SDLG-branded backhoe loaders and motor graders will better serve customer demands in the large and growing value segment of the market.

Volvo Group announced in late 2014 that Volvo Construction Equipment will discontinue development and production of backhoe loaders and motor graders in Europe and the Americas and will transfer these operations to its Chinese company, SDLG. Combined with other efficiency enhancement measures, this will result in a workforce reduction of about 1000 employees. Currently, motor graders are built at Volvo CE’s production sites in Shippensburg, U.S., and Pederneiras, Brazil, while backhoe loaders are manufactured in Pederneiras, Brazil, and Wroclaw, Poland. Ceasing European production of backhoe loaders will result in the closure of Volvo CE’s operations in Wroclaw. According to Volvo, 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 measures within Volvo CE are a part of the series of new activities within the increased scope of the Group’s Strategic Program 2013-2015, which was published in conjunction with the report on the third quarter 2014. Combined, these activities are expected to reduce the Group's structural costs by SEK 3.5 billion (440 million USD).