Caterpillar Exiting On-Highway Truck Business
Caterpillar has announced that it will no longer be accepting any further orders for CT660, CT680 and CT681 trucks, but will continue offering its support to its existing customers.
According to the vice president of Cat’s Industrial Power Systems Division, Ramin Younessi, “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.”
The news of ending its line-up of on-highway trucks soon came after the company announced its ongoing cost reduction program. The company plans to slash about $1.5 billion in costs which also includes about 5,000 job cuts in the following few years to come. The company also anticipates closing all such operating facilities that aren’t reaping off profits and plans to consolidate Cat’s Electric and Marine Power businesses and mining businesses to ensure no extra costs are being wasted.
As a joint collaboration with Navistar, the company launched its first ever on-highway truck back in 2011. Unfortunately, they were not received as expected urging the company to remove them from the market and stop its manufacturing in July 2015. The company also ended its six-year partnership with Navistar, just months after introducing its CT680. Almost a year from now, the company has taken over both the build and design phases for its on-highway trucks from Navistar.
Talking about the company’s future prospects, Chris Chadwick in an interview with the Equipment world in July was reported saying, “There is a lot of integration throughout our construction equipment line.” He further added, “And it will be a lot easier for us to continue to fully integrate our trucks with our construction machinery if we take full control of the manufacturing process. It also better places us to serve our customers’ needs in a quicker and more satisfactory manner.”
According to the company’s officials, Cat’s trucks will still continue to use Navistar engines but the company hopes for more control over the lineup of its products and aims to move manufacturing from Mexico to Victoria in Texas. Manufacturing in Victoria was already secheduled to begin in the first half of the year 2016; however, that didn’t seem to happen.
Younessi in his concluding remarks seemed hopeful despite their exit from the heavy on-highway trucks market saying, “We have not yet started truck production in Victoria, and this decision allows us to exit this business before the transition occurs.” – See more at: http://truckernews.com/caterpillar-exiting-onhighway-truck-business-p735-90.htm#sthash.73byN0vH.dpuf