Komatsu Ltd., the second-biggest maker of earthmoving equipment, said China will account for 10 percent of its construction machinery sales by 2010, as economic growth and preparations for the 2008 Beijing Olympics spur demand.
China accounted for 5.3 percent of Komatsu"s earth-moving equipment sales last fiscal year, totaling $591 million. The proportion rose to 7.5 percent in the three months to June, as revenue gained 62 percent to $235 million.
Komatsu, Caterpillar Inc. and other construction equipment makers are targeting China, as the country"s economic growth drives investment in factories and real estate. China is also spending $160 billion on roads, bridges and sports venues to remake Beijing ahead of the 2008 Olympics.
"The potential market for construction machinery in China is very big," Masahiro Sakane, the Tokyo-based company"s president, said in an interview in the city. "There"s no question sales from China will account for a tenth of overall sales"" by 2010. China"s economy grew 11.3 percent in the second quarter.
Demand for construction equipment in the U.S. will remain at "high levels"" until 2008, when it may start to slow, Sakane said. In the short term, rising demand from road construction and energy projects is covering a slowdown in homebuilding, he said. Komatsu generates a third of its earth-moving equipment sales from the Americas.
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