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Caterpillar's market challenges with the dollar and komatsu - infographic

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As Chinese demand has slowed down for earth moving and construction equipment following their slowdown of industry, Caterpillar Inc. has struggled against this and the local commodities slump. Now, Komatsu is putting extra pressure on Caterpillar because the Japanese yen has plunged, allowing it to be more competitively priced.

Read more: http://resolute-equipment.com/news/94-caterpillars-market-challenges

Published in: Engineering
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Caterpillar's market challenges with the dollar and komatsu - infographic

  1. 1. Resolute Equipment brings you the latest news from the coal mining industry, while also supplying a wide range of heavy earth moving machinery and equipment and mining machinery parts – from all the biggest brands - to a multitude of clients in the construction and mining industries. Resolute Equipment July 2016 1300 308 840 | info@resolute-equipment.com www.resolute-equipment.com 20% 2015 The yen dropped over FOURTH YEAR IN A ROW THAT CATERPILLAR WILL REALISE LOWER REVENUES KOMATSU IS TAKING EVERY ADVANTAGE OF THIS SITUATION This policy means that Komatsu will have increased margin in their product. Caterpillar reporting that Komatsu are being 'aggressive' in their dealing and bidding. As Chinese demand has slowed down for earth moving and construction equipment following their slowdown of industry, Caterpillar Inc. has struggled against this and the local commodities slump. Now, Komatsu is putting extra pressure on Caterpillar because the Japanese yen has plunged, allowing it to be more competitively priced. challenges with the dollar and Komatsu In order to compete with Komatsu, Caterpillar would have to decrease margin. Decreasing prices in an economic environment where currency is already worth 20% more than in Japan means that this would put enormous strain on Caterpillar. It is clear that Komatsu does benefit from decreased yen value; however, they say their success is attributed to their strict policy of slightly increasing prices every year regardless of currency movements. As well as Komatsu's rising power with the falling yen, Caterpillar also has some other challenges. Declines in commodity prices have decreased the sale of mining equipment globally, which has taken its toll on Caterpillar's revenue. Mike DeWalt, Vice President, Caterpillar “Komatsu could have placed themselves in a more cost-competitive position in the market.” Doug Oberhelman, Chief Executive Officer and Chairman, Caterpillar “Strong dollar policy.” 'That led us to basically go to a simple strategy: That is, produce where we sell.” “If we were solely an exporter, we’d be a lot more exposed.” CATERPILLAR'S MARKET

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