In news that has little real affect on the Australian market but is probably an indicator of the company’s future directions, Caterpillar has announced it will discontinue production of its on-highway vocational trucks in the USA.
It is an announcement that signals another turn for Cat which has had more changes of tack than a racing yacht of late and has been mirrored in its relationship with Navistar. Here in Australia the Cat name is really just a way for Navistar to market its trucks with a Cat engine and badge to appeal to a certain sector of the market, particular when Navistar brings the International brand back here whenever that might be in future.
Caterpillar says the decision is based on the current business climate in the US truck industry and a thorough evaluation of the business.
“Remaining a viable competitor in this market would require significant additional investment to develop and launch a complete portfolio of trucks, and upon an updated review, we determined there was not a sufficient market opportunity to justify the investment,” said Ramin Younessi, vice president with responsibility for Caterpillar’s Industrial Power Systems Division.
The move signals a rapid about face for the company which only launched its first vocational truck in the North American market in 2011, working with Navistar on the products’ design and build.
It announced just last year that the relationship with Navistar was changing and that it intended to begin independently designing and manufacturing its vocational truck products at the its own Caterpillar plant in Victoria, Texas.
“We have not yet started truck production in Victoria, and this decision allows us to exit this business before the transition occurs,” said Younessi.
With the downturn in commodity prices and mining activity around the world one would have thought Cat would see the on highway sector as a way of diversifying and putting its eggs in more than one basket but there doesn’t seem to be much logic in much that Big Yellow is doing these days.