Kobelco sees crane sales down, looks to future in China and India

4 May 2011

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Kobelco Cranes’ parent company Kobe Steel has announced its financial results for Fiscal 2010. Crane sales decreased despite expanding markets in Asia, although Kobe forecasts changing fortunes.

Sales for the Kobelco Cranes segment, which includes wheel cranes, large construction equipment, and hydraulic crawler cranes, totalled ¥40,968m ($505m).

Unit sales were down from last year and demand was reported as ‘sluggish’. This resulted in a segment sales dive of 25.8% from the previous year. Ordinary income decreased ¥2.5bn, compared with the previous year, to a loss of ¥1.3bn.

A substantial increase in unit sales in another segment, hydraulic excavators, compared to previous years, helped to ease the loss. China, Southeast Asia and Japan saw a recovery of demand for excavators. Sales for this segment increased 45% from the previous year.

Despite low crane sales, new overseas locations were part of Kobe’s plan increase the value of the Kobelco brand. Kobe moved to establish crawler crane manufacturing facilities in India and China.

Kobe forecasts a high demand for crawler crane sales in both locations. China already has more than 40% share of world demand for crawler cranes, and India’s demand will grow, Kobe says. Kobe plans to compete with the local market by scaling up its local parts procurement to quickly meet customer needs.

Additional measures to improve Kobelco Cranes include strengthening “monozukuri-ryoku”, which translates as manufacturing strengths and offering services.

Improving economies in China, the US and Europe contributed to overall higher sales volumes for Kobe’s Steel Group. Even these gains, however, slowed in the third quarter. This was due to the high price of yen and economic policy retrenchment, Kobe said.