Komatsu Ltd.¡¯s customers in China are reluctant to buy construction equipment because they are unsure when building projects will start, underscoring the challenges the Japanese supplier and its peers face in a market that is cooling more than expected.
¡°Things in China are tougher¡± than previously forecast, Chief Executive Officer Tetsuji Ohashi said last week in an interview at the company¡¯s Tokyo headquarters. ¡°Customers themselves are unsure of the timing for the start of construction works. It feels like they¡¯ll wait to buy machinery until after they see that projects are underway.¡±
Komatsu¡¯s concerns in China mirror those of Hitachi Construction Machinery Co., which last week said excavator demand this quarter is running almost 50 percent below year-ago levels. In response to conditions in China, Komatsu is reducing labor costs, while Hitachi is cutting stockpiles by operating Chinese plants at half capacity.
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