JCB dumps Sumitomo, as Case steps up to the altar...

by Fiona Kingston and Ian Brown



JCB has ended its joint venture to build excavators with Sumitomo of Japan with immediate effect. The deal had more than two years years to run and was not scheduled to end until 2001.

The split has paved the way for Sumitomo and Case to sign a deal allowing the latter to sell the Japanese firm's excavators in mainland Europe. (See story below.)

JCB will continue to build its current range of Sumitomo-designed models, but now can sell them worldwide. The original agreement allowed sales only in Europe.

There are 14 Sumitomo-designed, tracked models - 7-45t - and two JCB-designed, wheeled models - 13 and 16t - in the current range.

These models will continue in production and sale with design improvements and model launches as progress permits.

JCB already sources the Isuzu power units and some proprietary hydraulic components independently and will continue to do so. In addition, Sumitomo will continue to supply JCB with components and spare parts for at least 10 years.

A JCB spokesman said: "The planned growth of JCB relies on us being able to offer a full range of products worldwide

Sir Anthony Bamford, chairman and MD said: "We can now do so through our own distribution network."

We had a good working relationship with Sumitomo, which is demonstrated by the continuing co-operation over the supply of parts and components. However, it was felt that the joint venture had fulfilled its original aims and it was time to move on."

The Japanese trading house Itochu held 10 per cent of the original joint venture and will retain that shareholding in JCB's excavator business.

In the early days of the joint venture JCB held number one in the UK sales league at some points. But recently it has slipped somewhat.

It is currently believed that JCB has achieved UK sales of around 240 units in the six-month period to June 1998. This puts it in third place behind the leader Fiat-Hitachi and second-placed Komatsu.