CNH Industrial N.V. has agreed to enter into a new licensing agreement with Sumitomo (S.H.I.) Construction Machinery Co. Ltd., a wholly owned subsidiary of Sumitomo Heavy Industries, Ltd.
Under this new technology license and component supply agreement, CNH Industrial will manufacture Sumitomo designed crawler excavators (models ranging from 13 to 35 tonnes) at designated plants within its manufacturing network. Start of production of the new localized models is planned for mid-2016.
This agreement also extends the existing Global Product Supply (OEM) agreement between CNH Industrial and Sumitomo (S.H.I.) Construction Machinery for the sourcing of excavators from Sumitomo plants.
Sumitomo has been a supplier to the CNH Industrial global distribution network since 1992 for models ranging from 7 to 80 tonnes. This next step will further strengthen the partnership between the two companies.
“With this new agreement CNH Industrial has completed the transition from its previous dual source excavator strategy to a single global partner. This new licensing agreement builds on our successful long-term relationship with Sumitomo. It confirms CNH Industrial’s intention to invest and leverage the most advanced specialist players in the industry in order to provide customers around the world with construction equipment that consistently delivers performance and productivity” said Richard Tobin, CNH Industrial CEO and Brand President of Case and New Holland Construction.
“We are excited to embark on this new phase of our partnership with Sumitomo (S.H.I.) Construction Machinery as it secures our supply position in this important product category and increases our manufacturing flexibility to meet the demands of our customers”.
“Sumitomo and CNH Industrial’s relationship will reach a new stage as both companies pursue synergies through this agreement. By maintaining and building on the strong relationship between the two companies, we will aim to grow our market share in the construction machinery sector ”said Mikio Ide, President of Sumitomo (S.H.I.) Construction Machinery.
Many opportunities under agreement
The agreement comprises two parts – an extension of the existing agreement with the CASE brand and a new agreement, to run alongside, for both CASE and NEW HOLLAND brands. This opens up the possibility for New Holland to redevelop its position as a proven supplier of quality excavators in the most important class sizes.
Both companies say that there will be further announcement relative to the brands at a later stage, although no time is given. However, Contractors World has been told that CNH will produce the machine under their own brands and not that of Sumitomo. Both companies have also confirmed that the agreement is worldwide – there are not geographical limitations.
This makes for a very interesting Intermat 2015, the next major construction trade event. Further down the line, visitors to Bauma 2016 can expect to see an interesting assembly of Sumitomo excavators that have been ‘Europeanised’ to meet local customer expectations on both the Case and New Holland stands.