Hyundai, CNH Sign Mini-Excavator Deal
By pdamon12 September 2016
CNH Industrial has announced an exclusive agreement with South Korea’s Heavy Industries for the production and development of mini-excavators.
Under the contract, Hyundai Heavy Industries will ship 6-ton and smaller excavators to CNH Industrial for 10 years with a three year renewal option, starting next year. Hyundai did not disclose the contract value, but it said the deal would double its annual compact excavator sales volume to 9000 units. Hyundai Heavy Industries and CNH Industrial also agreed to collaborate on developing new models.
Hyundai will supply 5- and 6-ton class excavators on an original equipment manufacturing basis and 1- to 4-ton class excavators in complete knock-down kits for CNH Industrial to assemble and sell. The farm machinery and construction equipment maker will market the excavators under its brands Case and New Holland across the world, except in South Korea.
The announcement also said that the two companies will benefit from synergies in product development, sourcing, manufacturing, and possible future powertrain opportunities.
“This relationship brings together the know-how and expertise of two leading global construction equipment manufacturers, allowing us to take advantage of synergies in terms of technology selection and adaptation, component sourcing, and research and development costs. Our ability to manufacture and source from our geographically complementary industrial base will allow for scale advantages in product costs to be realized, while ensuring that product lead times and logistics costs are minimized for our dealer network,” said Rich Tobin, chief executive officer, CNH Industrial.