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SUMITOMO NEWSVol.10

Partnership with dealers will drive our overseas strategy

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  • Global Topics

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Partnership with dealers will drive our overseas strategy

Our relations with companies in overseas markets have become a highpriority challenge. A young employee of our International Sales Department interviewed President Shimomura regarding his global business plans.

President (& CEO)
Shinji Shimomura

Sales Division
- International Sales Department
- APAC & AFME Section
Keiwa Nakasuma

Sales Division
- International Sales Department
- America & Europe Section
Kazusa Suzuki

Nakasuma

Let me please start by asking you to give your assessment of the current status of the world's construction market.

Shimomura

With regards to hydraulic excavators, in the current global market, roughly 160 thousand of them are sold every year. 80 thousand of them are sold in Japan, Europe and North America, the rest in China, ASEAN, and countries in the Middle East and South America.
Demand in the emerging market has grown rapidly along with the economic growth in those countries. Growth in China is significant and the demand has expanded to 160 thousand (more than 6t) in 2011. However, the market is predicted as reducing to one-fourth of its peak due to the fall in China's economic growth.
Other emerging markets are in a similar situation.
By contrast, the size of the market in Japan, Europe and North America has not changed so much. Because of these market circumstances, we are planning to expand in a balanced manner in both markets, in Japan, Europe and North America on the one hand, in emerging markets on the other.

Nakasuma

How are you going to prepare for the emerging markets?

Shimomura

Although the demand has decreased, China and ASEAN demand is expected to grow since their GDPs are still low. The rapid expansion of demand, which we have witnessed up until now cannot be expected in the future, but the market will certainly exhibit steady growth.

Nakasuma

And Middle Eastern countries? Turkey is a very important market for our company, is it not?

Shimomura

Turkey is an economically stabilized country in the Middle East region; it has a huge market and we have a large share in that market. We are curious about the country's political climate and watching its progress with interest. Middle Eastern countries are likely to expand their markets in the near future and it can be said that their markets areup-and-coming, although they do present geopolitical risks.
Providing products which meet the needs of each market is important in such situations. Since we have factories in China and Indonesia, we think we have sufficient opportunities of increasing sales in the markets of emerging countries including South America and Africa.

Building an interactive relationship!

Suzuki

Please tell me about our company's products, in particular excavators. What is the strength of our company?

Shimomura

I think excavators are the most classic product, although there are many kinds of construction machines. An excavator is composed of many components. But when two manufacturers assemble an excavator using same components from same suppliers, the machines will not produce the same performance.
For instance, making the exact same excavators as ours is impossible even though a Chinese manufacturer uses an Isuzu engine or the KYB control valve which we use. This is because the technologies of lapping and controlling the components are necessary. You see, we have proficient technologies. And because we have such proficient technologies, we were able to develop the LEGEST series with great energy saving functions before other companies in the same field.

Suzuki

In overseas markets, our company's products are mainly sold through distributors. Please tell me about our relationship with those distributors.

Shimomura

Distributors are important business partners.
Therefore, we think that we must cooperate with them and support them in a proactive manner. We also think that it is our duty to build an interactive relationship by trying to solve the problems they face; and we are willing to expand the business by exhibiting our products in exhibitions all around the world, with cooperation from our distributors.
On the other hand, what we have to ask our distributors is to understand the advantages of our products when selling them, and build a firm relationship with our customers. We also want them to give us feedback from our customers so that we will be able to develop better products.

Suzuki

New training centers were built in the factories in Chiba and in Indonesia. What do you think about this?

Shimomura

Not only are we doing this for our own employees, but we are also educating the employees of our distributors.
For example, trainees are able to operate the actual machine so that they can expand their knowledge and experience of our products and understand the differences between ours and other manufacturers' products. Furthermore, we train service personnel in order to refine their skill in providing quick service when a machine breaks down.
I often say “make fans of Sumitomo.” As a matter of course, our customers will not continue to use our products if they do not like our products and personnel. And in order to increase our fans, we must persuade distributors to be Sumitomo fans, and through them spread our products by word of mouth. We think it is very important to support our distributors to encourage them to share the same philosophy among Sumitomo, distributors and customers. Training centers help us achieve this purpose.

Shinji Shimomura
President and CEO

My name is Shinji Shimomura and I recently assumed the post of the president of this company.

Sumitomo's products are being developed focusing on “economic performance” such as fuel efficiency, “productivity performance” such as speed and power and “safety performance” such as functions to support workers' safety.
The fuel efficiency of our hydraulic excavator is especially highly valued at home and abroad. Our hybrid machines, based on our excavators with high economical performance are successfully introducing new functions ahead of other companies around the world with our leading-edge technology.
I believe that the duty of our company is to “contribute to society through infrastructure.” To do so, it is crucial to develop unique and quality products. It's our sincere desire to make efforts to satisfy our customers and we wish for your continued patronage.

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