Volvo Construction Equipment has started production of excavators under its Chinese brand at a $10-million assembly plant in Brazil. Excavators from China-based Shandong Lingong Construction Machinery Co. Ltd. (SDLG) are being built in Volvo's facility in Pederneiras, Brazil, for sale in the Brazilian market.
The first production run will include four SDLG crawler-excavator models: the LG6150E, LG6210E, LG225E and LG6250E. These machines fall in the 13.8-metric-ton to 24.3-metric-ton weight classes. The excavators will be sold primarily in the construction, forestry, agricultural and extraction industries, says Volvo.
According to Volvo, this assembly plant will be the first SDLG production facility outside of China. The new Brazil assembly plant has been built inside of an existing Volvo manufacturing facility. Volvo also has announced that it will begin importing SDLG wheel loaders to North America from China in September.
SDLG already has distributors in Brazil, and Volvo said in a statement that SDLG "will continue to operate in Brazil through its own branded organization with its dedicated distribution network and sales force with customer support." Volvo owns 70% of SDLG.
Rather than compete with its own machines in the Brazilian market, Volvo sees SDLG as a discount option for buyers, describing its SDLG machines as a "value brand" and "cost-effective" in a statement about the announcement. SDLG machines lack some of the features found in the current lineup of Volvo's machines, such as high-end electronics.
In a press release, Volvo Construction Equipment CEO and President Pat Olney characterized the move as a response to the Brazilian market. "Localized production will help SDLG be more flexible and responsive to its customers and dealers in the region," he said. "We’re taking advantage of the Volvo Group’s long history in Brazil to introduce an exciting new initiative with these locally built SDLG excavators."
