The almost iconic UK-based construction machine manufacturer JCB is predicting a flat year ahead, this off the back of a healthy 20% rise in pre-profits in 2007; sales rose by 28% to £2.25bn.
Having its eggs in many baskets, however, has proven prudential as although JCB will undoubtedly feel the pinch of a stalling construction market, particularly in the US, it has the cushion of its foothold in growing economies, particularly India and Russia.
In the US JCB consistently chugs up behind domestic producer Caterpillar and Japan’s Komatsu with a third place share of the market whilst India’s three JCB plants sold 17,000 machines - a quarter of global sales and 60% up on 2006.
Although 6,000 of JCB’s 9,000 employees are UK based, producing two-thirds of its machines, India is their biggest market in volume terms.
John Patterson, Chief Executive, reports that JCB is holding its own in the difficult US market which has seen a 13% slump in total construction machine sales; JCB has managed to stay just below this figure.
So does this prove that globalisation isn’t all bad if you spread your risks widely enough?
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