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Caterpillar to break Outsourcing deal with Navistar and frame its own Dump trucks

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Caterpillar Inc. a NYSE company – listed CAN, has recently announced that the company is eyeing to build dump trucks of its own brand at a plant located in Texas. Consequently, the company is planning to adjourn its tie-up with Navistar International Corp., which since 2011 was building the trucks for Caterpillar. The news reported by the company highlights their massive expansion plan to amend the sales process of their branded trucks.

Since last 4 years, the company has been selling the on-road trucks which were built by Navistar. The Caterpillar branded trucks which was expecting a huge turnover among the truck buyers couldn’t hit the expected lines of profit; as the sales of trucks for the last three years has summoned to 1000 when it was averaged. “By striking out independently, we can better-serve those customers. The goal is to grow our sales and presence in the market hugely,” said Chris Chadwick, Director of Caterpillar’s on-highway truck group. With the improvised customer service and faster production of the trucks, the company plans to efficaciously change Caterpillar construction equipment customers into truck buyers.

At present day, Caterpillar provides trucks of three models. Whilst the Trucks are basically used at construction sites as dump trucks, however, Mr. Chadwick notes Caterpillar signifies to bolster marketing strategies of the trucks for other duties as well such as refuse collection and hauling logs from timber harvesting operations. Although, he further states Caterpillar has no intentions to market its branded trucks for long-distance delivery services.

Caterpillar anticipates embarking on assembling the trucks at its own plant in Victoria, Texas by the first half of the next financial year. Earlier in 2012, the plant was built in Japan and imported to North America to assemble excavators. The company will however, persistently power its trucks with 13-liter engines provided by Navistar. Along with that, the company will also offer a 15-liter engine. “We do not have plans to re-enter the engine market for on-highway trucks,” he said.

Caterpillar the world’s leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives has been making sustainable progress since 90 years in multiple continents. Primarily, the company is focused towards its three product segments which include Construction Industries, Resource Industries and Energy & Transportation.

Navistar spokesperson commented that by the beginning of the early next year the company would launch its new line of dump trucks individually. The company will use the Technology and Intellectual property from Caterpillar. A senior official of Navistar added, “Caterpillar and Navistar will have the opportunity to leverage certain joint intellectual property, collaborate with suppliers and utilize licensing agreements while moving ahead in the upcoming years.”

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