Global Construction & Farm Machinery & Heavy Trucks

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Global Construction & Farm Machinery & Heavy

Trucks Industry Profile

Reference Code: 0199-2029Publication date: March 2009

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Global - Construction & Farm Machinery & Heavy Trucks

© Datamonitor (Published March 2009)

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EXECUTIVE SUMMARY



EXECUTIVE SUMMARY

Market Value

The global construction and farm machinery and heavy trucks market grew by 8.1% in 2008 to reach a value of $144 billion.

Market Value Forecast

In 2013, the global construction and farm machinery and heavy trucks market is forecast to have a value of $189.9 billion, an increase of 31.9% since 2008.

Market Segmentation I

Earthmoving equipment accounts for 18.3% of the global construction and farm machinery and heavy trucks market's value.

Market Segmentation II

Americas accounts for 35.6% of the global construction and farm machinery and heavy trucks market's value.

Market Share

Caterpillar, Inc. accounts for 34.1% of the global construction and farm machinery and heavy trucks market's value.

CONTENTS



TABLE OF CONTENTS

EXECUTIVE SUMMARY 3

CHAPTER 1 Market Overview 7

1.1 Market Definition 7

1.2 Research Highlights 7

1.3 Market Analysis 8

CHAPTER 2 Market Value 9

CHAPTER 3 Market Segmentation I 10

CHAPTER 4 Market Segmentation II 11

CHAPTER 5 Market Share 12

CHAPTER 6 Competitive Landscape 13

CHAPTER 7 Leading Companies 16

7.1 Caterpillar, Inc. 16

7.2 Deere & Company 20

7.3 CNH Global N.V. 22

7.4 Komatsu Ltd. 25

CHAPTER 8 Market Forecasts 27

8.1 Market Value Forecast 27

CHAPTER 9 Appendix 28

9.1 Methodology 28

CONTENTS



9.2 Industry Associations 29

9.3 Related Datamonitor Research 29

CONTENTS



LIST OF TABLES

Table 1: Global Construction & Farm Machinery & Heavy Trucks Market Value: $ billion, 2004-2008 ..........................................................................................................9

Table 2: Global Construction & Farm Machinery & Heavy Trucks Market Segmentation I: % Share, by Value, 2008 ..................................................................................10

Table 3: Global Construction & Farm Machinery & Heavy Trucks Market Segmentation II: % Share, by Value, 2008 ..................................................................................11

Table 4: Global Construction & Farm Machinery & Heavy Trucks Market Share: % Share, by Value, 2008..................................................................................................12

Table 5: Key Facts: Caterpillar, Inc.................................................................................16

Table 6: Key Financials: Caterpillar, Inc .........................................................................19

Table 7: Key Facts: Deere & Company ..........................................................................20

Table 8: Key Facts: CNH Global N.V..............................................................................22

Table 9: Key Financials: CNH Global N.V.......................................................................24

Table 10: Key Facts: Komatsu Ltd....................................................................................25

Table 11: Global Construction & Farm Machinery & Heavy Trucks Market Value Forecast: $ billion, 2008-2013 ..........................................................................................27

MARKET OVERVIEW



CHAPTER 1 MARKET OVERVIEW

1.1 Market Definition

The global construction and farm machinery and heavy trucks market is deemed to be the revenue accrued by manufacturers of rolling machinery, earth-moving and construction equipment, heavy farm machinery and manufacturers of related parts. Any currency conversions used in this report have been calculated using constant annual average exchange rates.

1.2 Research Highlights

The global construction and farm machinery and heavy trucks market generated total revenues of $144 billion in 2008, representing a compound annual growth rate (CAGR) of 7.2% for the period spanning 2004-2008.

Earthmoving equipment sales proved the most lucrative for the global construction and farm machinery and heavy trucks market in 2008, generating total revenues of $26.3 billion, equivalent to 18.3% of the market's overall value.

The performance of the market is forecast to decelerate, with an anticipated CAGR of 5.7% for the five-year period 2008-2013, which is expected to drive the market to a value of $189.9 billion by the end of 2013.

MARKET OVERVIEW



1.3 Market Analysis

After quite substantial fluctuation in annual growth rates, the global construction and farm machinery and heavy trucks market is forecasted to stabilize and post slower but steadier growth rates.

The global construction and farm machinery and heavy trucks market generated total revenues of $144 billion in 2008, representing a compound annual growth rate (CAGR) of 7.2% for the period spanning 2004-2008. In comparison, the European and Americas industries reached respective values of $38.6 billion and $51.3 billion in 2008.

Earthmoving equipment sales proved the most lucrative for the global construction and farm machinery and heavy trucks market in 2008, generating total revenues of $26.3 billion, equivalent to 18.3% of the market's overall value. In comparison, sales of harvesting equipment generated revenues of $18 billion in 2008, equating to 12.53% of the market's aggregate revenues.

The performance of the market is forecast to decelerate, with an anticipated CAGR of 5.7% for the five-year period 2008-2013, which is expected to drive the market to a value of $189.9 billion by the end of 2013.

MARKET VALUE



CHAPTER 2 MARKET VALUE

The global construction and farm machinery and heavy trucks market grew by 8.1% in 2008 to reach a value of $144 billion.

The compound annual growth rate of the market in the period 2004-2008 was 7.2%.

Table 1: Global Construction & Farm Machinery & Heavy Trucks Market Value: $ billion, 2004-2008

Year $ billion % Growth 2004 109.02005 117.1 7.40%2006 122.4 4.60%2007 133.1 8.70%2008 144.0 8.10% CAGR, 2004-2008: 7.2% Source: Datamonitor D A T A M O N I T O R

Figure 1: Global Construction & Farm Machinery & Heavy Trucks Market Value: $ billion, 2004-2008

Source: Datamonitor D A T A M O N I T O R

0

2040

6080

100

120140

160

2004 2005 2006 2007 2008

$ bi

llion

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%10.0%

% G

rowth

$ billion % Growth

MARKET SEGMENTATION I



CHAPTER 3 MARKET SEGMENTATION I

Earthmoving equipment accounts for 18.3% of the global construction and farm machinery and heavy trucks market's value.

Harvesting equipment accounts for a further 12.5% of the market's revenue.

Table 2: Global Construction & Farm Machinery & Heavy Trucks Market Segmentation I: % Share, by Value, 2008

Category % Share Earthmoving equipment 18.30%Harvesting equipment 12.50%Tractors 9.50%Industrial tractors and other industrial rolling machines 9.30%Cranes, lifting and loading equipment 1.70%Other 48.70% Total 100.0% Source: Datamonitor D A T A M O N I T O R

Figure 2: Global Construction & Farm Machinery & Heavy Trucks Market Segmentation I: % Share, by Value, 2008

Other48.7%

Cranes, lif ting and loading equipment

1.7%

Industrial tractors and

other industrial rolling machines

9.3%

Tractors9.5%

Harvesting equipment

12.5%

Earthmoving equipment

18.3%


MARKET SEGMENTATION II



CHAPTER 4 MARKET SEGMENTATION II

Americas accounts for 35.6% of the global construction and farm machinery and heavy trucks market's value.

In comparison, Asia-Pacific accounts for a further 30.4% of the market's revenue.

Table 3: Global Construction & Farm Machinery & Heavy Trucks Market Segmentation II: % Share, by Value, 2008

Geography % Share Americas 35.60%Asia-Pacific 30.40%Europe 26.80%Rest of the World 7.10% Total 100.0% Source: Datamonitor D A T A M O N I T O R

Figure 3: Global Construction & Farm Machinery & Heavy Trucks Market Segmentation II: % Share, by Value, 2008


Americas35.6%

Asia-Pacif ic30.4%

Europe26.8%

Rest of the World7.1%

MARKET SHARE



CHAPTER 5 MARKET SHARE

Caterpillar, Inc. accounts for 34.1% of the global construction and farm machinery and heavy trucks market's value.

In comparison, Deere & Company accounts for a further 14.9% of the market's revenue.

Table 4: Global Construction & Farm Machinery & Heavy Trucks Market Share: % Share, by Value, 2008

Company % Share Caterpillar, Inc. 34.10%Deere & Company 14.90%Komatsu Ltd. 12.70%CNH Global N.V. 12.10%Other 26.20% Total 100.0% Source: Datamonitor D A T A M O N I T O R

Figure 4: Global Construction & Farm Machinery & Heavy Trucks Market Share: % Share, by Value, 2008


Caterpillar, Inc.34.1%

Deere & Company

14.9%

Komatsu Ltd.12.7%

CNH Global N.V.12.1%

Other26.2%

COMPETITIVE LANDSCAPE



CHAPTER 6 COMPETITIVE LANDSCAPE

The global construction & farm machinery & heavy trucks market is characterized by intense competition due in part to high establishment and fixed costs and barriers to exit from the market. Buyers are fragmented with a number of companies of varying size having a demand for products.

Suppliers have fairly low differentiation of raw materials and there is often little to distinguish between suppliers and so manufacturers have low switching costs. Entry to the market is possible on a small scale through specialized manufacture, however this is likely to be on a local rather than a global scale.

Competition between large players is rather intense due to a number of factors such as high fixed costs and low-switching costs for buyers but quite healthy market growth acts may ease the rivalry level to certain extend. Overall, the global construction & farm machinery & heavy trucks market in assessed as moderate.

Buyers in this market are usually highly fragmented with a number of medium and large businesses requiring products from this market. The loss of business from larger buyers would adversely affect market players' revenues. Brand loyalty plays a role in reducing buyer power.

A number of leading market players have established globally recognized brands, for example CNH Global trade a number of products under the 'New Holland' brand which has high levels of brand identification and loyalty.

Buyer power is strengthened by low switching costs and the relative un-differentiation of a number of products. However, buyers’ vertical integration is rather unlikely which takes from buyer power. Overall, buyer power is moderate.

With fairly low differentiation of raw materials in this market, there is often little to distinguish between suppliers and because of that manufacturers have low switching costs. The price of raw materials is volatile, with substantial variations being evident from year to year.

For many commodities purchased by market players, including steel, copper and aluminum products and products derived from crude oil, continuing global economic growth, sustained high demand from China and other emerging economies and volatility in foreign exchange rates have led to significant fluctuations in raw material costs.




Market players attempt to overcome price fluctuations through the adoption of hedging strategies and by entering into long-term contracts with suppliers where possible. A number of market players are highly reliant on single suppliers. For example, CNH Global relies upon single suppliers for certain components, primarily those that require joint development between the company and their suppliers. Overall, supplier power is moderate in the market.

Entry to the market may be achieved by establishing brand new company or by an existing company diversifying its operations to include the manufacture of construction and farm machinery and heavy trucks. The global market is dominated by a number of large international players.

Entry to the market on such a level would require considerable capital outlay to set up production plants involving high fixed costs. However, small-scale entry is possible by short-line and specialty manufacturers. Entrants on a small-scale would generally operate on a local rather than a global level and operate in individual markets.

Large market players possess significant IP assets in terms of patents, licenses and trademarks. Furthermore, leading manufacturers have established strong brands that are recognized globally. Regulations exist in this market such as international environmental laws governing the use, transport and disposal of substances and control of emissions.

In addition to governing manufacturing and other operations, these laws often impact the development of products, including required compliance with air emissions standards applicable to internal combustion engines. The likelihood of new entrants is moderate overall.

Substitutes as such do not exist in this market, however, they may be considered in terms of used products being sold privately. This alternative is cheaper than those bought new, however vehicles are unlikely to be under any kind of warranty if sold privately which may be of great significance when it comes to heavy duty work construction and farm machinery and heavy trucks are designed for. Overall, the threat of substitutes is moderate.

The global construction and farm machinery and heavy trucks market is dominated by a small number of large multinational players. Competition between large players is intense due to a number of factors such as high fixed costs and low-switching costs for buyers.

The revenues accrued by market players are highly dependent upon end-user industry conditions. For example, the sale of farm machinery is affected by economic conditions - farmers tend to postpone the purchase of equipment when the farm economy is depressed.




Seasonality is also a factor for a number of end-user industries. However, market players tend to produce products for a number of industries including agricultural, mining, construction etc. Consequently players are unlikely to be highly dependent on the sales to one industry, but are dependent on the market overall.

Rivalry is further alleviated by branding which allows an extent of differentiation between products. However, rivalry remains moderate in the market overall.

LEADING COMPANIES



CHAPTER 7 LEADING COMPANIES

7.1 Caterpillar, Inc.

Table 5: Key Facts: Caterpillar, Inc. Address: 100 North East Adams Street, Peoria, Illinois 61629, USA Telephone: 1 309 675 1000 Fax: 1 309 675 1182 Website: www.cat.com Financial Year-End: December Ticker: CAT Stock Exchange: NYSE Source: Company Website D A T A M O N I T O R

Caterpillar is the one of the largest manufacturers of earth moving machinery and a leading supplier of agricultural equipment. The company makes construction, mining, and logging machinery, diesel and natural gas engines, industrial gas turbines, and electrical power-generation systems.

Caterpillar has plants worldwide and sells its equipment globally via a network of about 181 dealers. The company products and components are manufactured in 50 US facilities and in over 60 other locations, in 23 countries around the globe. The company had more than 8,500 suppliers.

The company provides financing and insurance for its dealers and customers. The company also sells branded products and items made by third parties. Caterpillar Power Ventures, which is a subsidiary of Caterpillar and is part of the Caterpillar financial products division, develops, owns, and operates electrical power plants powered by Caterpillar engines and solar gas turbines in locations around the world.

The company operates principally in three business divisions: machinery, engines, and financial products.

The machinery division of the company includes activities related to design, manufacture, marketing, and sales of machinery equipments. These products include machinery and equipments for construction; mining and forestry; track and wheel tractors; track and wheel loaders; pipe layers; motor graders; wheel tractor-scrapers; track and wheel excavators; backhoe loaders; log skidders; log loaders; off-highway trucks; and articulated trucks.

LEADING COMPANIES



The company offers paving products, telescopic handlers, skid steer loaders and related parts. The company also offers logistics services for other companies through Caterpillar Logistics in this line of business.

The company's engines division includes the design, manufacture, marketing and sales of engines for Caterpillar machinery, electric power generation systems, on-highway vehicles and locomotives, marine, petroleum, construction, industrial, agricultural and other applications, and related parts.

The company manufactures diesel, heavy fuel and natural gas reciprocating engines for the on- and off-highway mobile markets, as well as for a range of stationary applications and manufactures industrial turbines for the oil and gas, and power generation markets.

Caterpillar is one of the leading providers of drilling and pumping equipment for the oil and gas sector. One of the main subsidiaries of the company, Caterpillar Remanufacturing services, is a leading provider of remanufacturing services to the automobile industry.

The financial products division of the company consists primarily of Cat Financial, Cat Insurance, Cat Power Ventures and their respective subsidiaries. Cat Financial provides a range of financing alternatives to customers and dealers for Caterpillar products. These products includes machinery and engines; solar gas turbines; other equipment and marine vessels.

Cat Financial also extends loans to customers and dealers. Cat Insurance provides various forms of insurance to customers and dealers to help support the purchase and lease of the company's equipment. Cat Power Ventures is an active investor in independent power projects using Caterpillar power generation equipment and services.

The company reports its revenues through ten business segments which include North America marketing, EAME, power systems and OEM solutions, financing and insurance services, Latin America, Asia/Pacific marketing, electric power, large power products division, heavy construction and mining division, and all other.

The North America marketing, EAME, power systems and OEM solutions, Latin America, Asia/Pacific marketing, electric power, large power products division, heavy construction and mining division, and all other segments forms the part of machinery and engines divisions.

The North America marketing segment of the company is responsible for marketing machinery through dealers in the US and Canada.

LEADING COMPANIES



The company's EAME marketing division is responsible for marketing machinery through dealers in Europe, Africa, the Middle East and the Commonwealth of Independent States.

The power systems and OEM solutions segment of the company is responsible for marketing and ongoing support of reciprocating engines sold into on-highway truck, marine and petroleum applications, and integrated component solutions to external original equipment manufacturers.

The financing and insurance services of the company provide financing to customers and dealers for the purchase and lease of Caterpillar and other equipment. The segment also provides financing for Caterpillar sales to dealers.

The segment's financing plans include operating and finance leases, installment sale contracts, working capital loans and wholesale financing plans. The segment also provides various forms of insurance to customers and dealers to help support the purchase and lease of our equipment.

The Latin America segment of the company is responsible for marketing machinery and engines through dealers in Latin America. The segment also includes the manufacturing of machinery and components used in a variety of construction and mining applications.

The Asia/Pacific marketing segment of the company is responsible for marketing machinery through dealers in Australia, Asia (excluding Japan) and the Pacific Rim.

The company's electric power is responsible for the design, manufacture and ongoing support of natural gas and diesel powered generator sets, and integrated systems used in the electric power generation industry. The segment also includes marketing through dealers worldwide.

The company's large power projects segment is responsible for the design, manufacture and ongoing support of C7 and larger reciprocating engines. These engines are used in various industries and applications including on-highway truck, electric power, industrial/rail, marine, petroleum and Caterpillar machinery.

The heavy construction and mining segment of the company is responsible for product management, development and support of medium and large track-type tractors, mining trucks, quarry and aggregate trucks, large wheel loaders, wheel tractor scrapers and track loaders.

The company's all other segment includes activities such as service support and parts distribution to Caterpillar dealers worldwide; logistics services for Caterpillar and other companies; remanufacturing of Caterpillar engines and components and remanufacturing services for other companies; design, manufacture and ongoing support for reciprocating engines used in industrial applications.

LEADING COMPANIES



Design, manufacture, marketing and ongoing support of turbines; regional manufacturing of construction and mining machinery and components in North America, Europe, Asia and Australia; design, manufacture and ongoing support of building construction, paving and forestry machinery and related components and control systems; and the design, manufacture, remanufacture, maintenance and services of rail-related products and services.

Key Metrics

Table 6: Key Financials: Caterpillar, Inc Metric 2003 2004 2005 2006 2007Revenues 22,807 30,306 36,339 41,517 44,958Net Income 1,099 2,035 2,854 3,537 3,541Profit Margin 4.8% 6.7% 7.9% 8.5% 7.9%Total Assets 36,711 43,095 47,553 51,449 56,132Total Liabilities 30,633 35,628 39,121 44,590 47,249Employees 67,828 73,033 81,673 90,160 101,333

Figures are in US$ million except for employees and margin growth Source: Company Filings D A T A M O N I T O R

Figure 5: Revenues & Profitability: Caterpillar, Inc.

05,000

10,00015,00020,00025,00030,00035,00040,00045,00050,000

2003 2004 2005 2006 2007

Year

US$

Mill

ions

0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%

Pro

fit M

argi

n (%

)

Revenues Net Income Profit Margin

Source: Company Filings D A T A M O N I T O R

LEADING COMPANIES



7.2 Deere & Company

Table 7: Key Facts: Deere & Company Address: 1 John Deere Place, Moline, IL 61265, USA Telephone: 1 309 765 8000 Fax: 1 309 765 5671 Website: www.deere.com Financial Year-End: October Ticker: DE Stock Exchange: NYSE Source: Company Website D A T A M O N I T O R

Deere & Company operates thorough subsidiaries, and is a producer of agricultural equipment; construction and forestry equipment; commercial grounds care machines; consumer lawn products; utility vehicles; and related financial services. The company's products and services are marketed primarily through independent retail dealer networks and major retail outlets.

The company primarily operates in the US and Canada. The company primarily operates through four business segments: agricultural equipment; commercial and consumer equipment; construction and forestry; and credit.

Under the agricultural equipment business segment the company manufactures and distributes a line of farm equipment and service parts, including tractors; combine, cotton and sugarcane harvesters; tillage, seeding and soil preparation machinery; sprayers; hay and forage equipment; material handling equipment, and integrated agricultural management systems technology. The company offers agricultural equipment primarily sold and serviced through the industry's premier dealer network in the US and Canada.

The commercial and consumer equipment business segment manufactures and distributes equipment, products and service parts for commercial and residential uses.

The segment's equipment include tractors for lawn, garden, commercial and utility purposes; mowing equipment, including walk-behind mowers; golf course equipment; utility vehicles; landscape products and irrigation equipment; and other outdoor power products. In addition to the equipment manufactured by the commercial and consumer division, Deere purchases certain products from other manufacturers for resale.

LEADING COMPANIES



The company's construction and forestry business segment offers a range of machines and service parts used in construction, earthmoving, material handling and timber harvesting. These include backhoe loaders; crawler dozers and loaders; four-wheel-drive loaders; excavators; motor graders; articulated dump trucks; landscape loaders; skid-steer loaders; and log skidders.

Under the credit business segment the company primarily finances sales and leases by John Deere dealers the US and has operations in 17 countries. In addition, it provides wholesale and lease financing to dealers of the foregoing equipment, provides operating loans, and finances retail revolving charge accounts. It also offers certain crop risk mitigation products and invests in wind energy development.

The company's also provides other services including health care operations through John Deere which provides managed health care plans.

Key Metrics

In fiscal 2008, Deere & Company posted net revenues and sales of $25,803.5 million, an increase of 20.1% on the previous year. Net income rose by 12.7% to $2,052.8 million.

LEADING COMPANIES



7.3 CNH Global N.V.

Table 8: Key Facts: CNH Global N.V.

Address: World Trade Center, Amsterdam Airport, Tower B 10th Floor, Schiphol Boulevard 217, 1118 BH Amsterdam, NLD

Telephone: 31 20 46 0429 Website: www.cnh.com Financial Year-End: December Ticker: CNH Stock Exchange: NYSE Source: Company Website D A T A M O N I T O R

CNH Global is a global manufacturer of agricultural and construction equipment. The company also offers an array of financial services products, including retail financing for the purchase or lease of CNH products. The company has 39 manufacturing facilities throughout the world, including facilities in Europe, Latin America, North America, China, India and Uzbekistan. The company distributes its products in approximately 160 countries through an extensive network of approximately 11,100 full line dealers and distributors.

CNH Global operates through three segments: agricultural equipment, construction equipment and financial services.

The company's agricultural equipment division manufactures and distributes tractors; combine harvesters; hay and forage equipment; seeding and planting equipment; tillage equipment; sprayers; and grape, cotton, coffee and sugar cane harvesters. The company also offers a large number of construction equipment products such as telehandlers, skid steer loaders and backhoe loaders. The company's primary product lines of agricultural equipment are sold under the Case IH and New Holland brands.

The CNH construction equipment division manufactures and distributes construction equipment, including excavators, crawler dozers, graders, wheel loaders, loader/ backhoes, skid steer loaders and trenchers. It is one of the leading manufacturers of backhoe loaders and has a strong position in skid steer loaders in North America and crawler excavators in Western Europe.

CNH's construction equipment segment has two sub segments: heavy construction equipment (over 12 metric tons), and light construction equipment (less than 12 metric tons). The end users of heavy construction equipment include construction companies, municipalities, local governments, rental fleet owners and forestry-related concerns.

LEADING COMPANIES



The end users of light construction equipment include contractors, rental fleet owners, landscapers, logistics companies and farmers. This segment's products are primarily sold under the Case and New Holland (along with Kobelco in North America) construction brand names.

CNH Capital, a subsidiary of CNH Global offers a range of financial services products, including retail financing for the purchase or lease of new and used CNH products. It also finances other manufacturers' products.

CNH offers retail financing in Brazil, Australia and Europe through wholly owned subsidiaries. It engages in retail financing in Western Europe through a joint venture with BNP Paribas Lease Group. CNH Global offers retail loans to final customers and wholesale financing to its dealers on a worldwide basis.

LEADING COMPANIES



Key Metrics

Table 9: Key Financials: CNH Global N.V. Metric 2003 2004 2005 2006 2007Revenues 10,069 11,545 11,806 12,115 14,971Net Income -157 125 163 292 559Profit Margin -1.6% 1.1% 1.4% 2.4% 3.7%Total Assets 17,727 18,080 17,318 18,274 23,745Total Liabilities 12,853 13,051 12,266 13,154 17,443Employees 26,800 25,700 25,400 25,300 28,100

Figures are in US$ million except for employees and margin growth Source: Company Filings D A T A M O N I T O R

Figure 6: Revenues & Profitability: CNH Global N.V.

-2,000

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

2003 2004 2005 2006 2007

Year

US

$ M

illio

ns

-2.0%

-1.0%

0.0%

1.0%

2.0%

3.0%

4.0%

Pro

fit M

argi

n (%

)

Revenues Net Income Profit Margin

Source: Company Filings D A T A M O N I T O R

LEADING COMPANIES



7.4 Komatsu Ltd.

Table 10: Key Facts: Komatsu Ltd. Address: 2 3 6 Akasaka, Minato ku, Tokyo 107 8414, JPN Telephone: 81 3 5561 2687 Fax: 81 3 3505 9662 Website: www.komatsu.com Financial Year-End: March Ticker: 6301 Stock Exchange: Tokyo Source: Company Website D A T A M O N I T O R

Komatsu is engaged in the manufacturing and sale of construction and mining equipment, industrial machinery and vehicles. It also has interests in housing, transportation and logistics equipment. Komatsu has operations in 16 countries worldwide. The manufacturing operations of the company and its subsidiaries are conducted primarily at plants in Japan, the US, Germany, the UK, Sweden, Indonesia, Brazil, Italy, China and Taiwan.

The company operates through three business segments: construction and mining equipment; industrial machinery, vehicles and other; and electronics.

The construction and mining equipment division is one of the largest manufacturers of construction, mining and utility equipment in the world. It develops, manufactures and sells excavators, loading machinery, leveling machines, transportation equipment, transportation machinery, forestry machines, underground construction machinery, resource recycling machinery, truck maintenance machines and other machinery, as well as engines and molded products.

The construction and mining equipment product line also includes a variety of utility equipment, mini to small machines (mini hydraulic excavators, mini wheel loaders, backhoe loaders, skid steer loaders, and other similar products) for landscaping and general construction.

The industrial machinery and vehicle division is engaged in the development, manufacture and sale of forge rolling machines, plating machinery, machine tools, industrial vehicles, defense equipments, and agro forestry machinery. This division operates through four subsidiaries: Komatsu forklift, Komatsu Industries Corporation, Komatsu logistics, and Komatsu Machinery Corporation.

LEADING COMPANIES



The electronics division develops, manufactures and sells electronic materials and temperature control equipment. The core business of Komatsu's electronics division includes semiconductor materials operations which involves the production of silicon wafers for the semiconductor industry.

Its products are classified into four categories: electronic materials, which consists of silicon wafers, polycrystalline silicon and monosilane gas; semiconductor process equipment, which consists of excimer laser; temperature control equipment, which consist of thermoelectric modules, semiconductor manufacturing related thermoelectric devices, communication equipment; and control equipment, which consists of network information terminals, local area network (LAN) peripheral equipment, mobile tracking, communication terminals, and vehicle controllers

Key Metrics

The company recorded revenues of JPY2, 243,023 million (approximately $19,693.7 million) in the financial year (FY) ended March 2008, an increase of 18.5% over 2007. The operating profit of the company was JPY332, 850 million (approximately $2,922.4 million) in the FY2008, an increase of 36% over 2007. The net profit was JPY208, 793 million (approximately $1,833.2 million) in FY2008, an increase of 26.8% over 2007.

MARKET FORECASTS



CHAPTER 8 MARKET FORECASTS

8.1 Market Value Forecast

In 2013, the global construction and farm machinery and heavy trucks market is forecast to have a value of $189.9 billion, an increase of 31.9% since 2008.

The compound annual growth rate of the market in the period 2008-2013 is predicted to be 5.7%.

Table 11: Global Construction & Farm Machinery & Heavy Trucks Market Value Forecast: $ billion, 2008-2013

Year $ billion % Growth 2008 144.0 8.10%2009 152.0 5.60%2010 159.2 4.80%2011 168.7 5.90%2012 178.9 6.10%2013 189.9 6.20% CAGR, 2008-2013: 5.7% Source: Datamonitor D A T A M O N I T O R

Figure 7: Global Construction & Farm Machinery & Heavy Trucks Market Value Forecast: $ billion, 2008-2013


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2008 2009 2010 2011 2012 2013

$ bi

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0.0%1.0%2.0%3.0%4.0%5.0%6.0%7.0%8.0%9.0%

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APPENDIX



CHAPTER 9 APPENDIX

9.1 Methodology

Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, and cross-checked and presented in a consistent and accessible style.

Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, Datamonitor’s in-house databases provide the foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview

Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends

Datamonitor aggregates and analyzes a number of secondary information sources, including:

- National/Governmental statistics - International data (official international sources) - National and International trade associations - Broker and analyst reports - Company Annual Reports - Business information libraries and databases

Modeling & forecasting tools – Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

APPENDIX



9.2 Industry Associations

The Construction Equipment Association Orbital House, 85 Croydon Road, Caterham, Surrey CR3 6PD, UK Tel: 0044 1883 334 499 Fax: 0044 1883 334 499 http://www.fmcec.org.uk

Association of Equipment Manufacturers 111 E. Wisconsin Ave. Suite 1000, Milwaukee, WI 53202-4806, US Tel: 001 414 272 0943 Fax: 001 414 272 1170 http://www.aem.org

9.3 Related Datamonitor Research

Datamonitor Industry Profiles

Global Materials

Global Electrical Equipment

Global Tires & Rubber

Global Industrial Machinery

Global Machinery

Global Commercial Services & Supplies

Global Marine

Global Airport Services

Global Highways & Railtracks

Global Marine Ports & Services

Global Transportation infrastructure

Global Construction & Farm Machinery & Heavy Trucks

Documents

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