Komatsu to streamline its product lineup to trim costs, allocate resources to design high-end models as competition from Asian rivals intensifies

Nevin Barich

TOKYO , January 11, 2013 (Bloomberg LP) – Komatsu Ltd., the world’s second- biggest construction equipment maker, will streamline its product lineup to trim costs and allocate resources to design high-end models as competition from Asian rivals intensifies.

The Japanese company plans to cut product lines for mid- and small-sized excavators, bulldozers and wheel loaders by 20 percent to about 100 at its Awazu plant in central Japan by March 2016, spokesman Hiroshi Ishihara said today by telephone.

Komatsu is accelerating development of value-added products, including driverless dump trucks used in mining, and fuel-efficient models by paring costs through cutbacks in its existing produce lines. Asian competitors, including China’s Sany Heavy Industry Co., are stepping up competition by offering lower-priced machinery as they challenge Komatsu and industry leader Caterpillar Inc. of the U.S.

Komatsu plans to increase research and development by 6.8 percent to 58.5 billion yen ($658 million) for the financial year through March 31, the company said on April 26.

The cutback was earlier today reported in the Nikkei newspaper, without saying where it obtained the information.

Komatsu gained 1.9 percent to 2,337 yen as of 1:36 p.m. on the Tokyo Stock Exchange, extending its gain in the past six months to 30 percent.

--Editors: Iain Wilson, Abhay Singh

To contact the reporter on this story: Masumi Suga in Tokyo at msuga@bloomberg.net

To contact the editor responsible for this story: Jason Rogers at jrogers73@bloomberg.net

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