Come 2010, driving your Caterpillar down the highway won’t be about what and who is powering your traditional brand of on-road truck. It will actually mark the make of the truck itself.
As part of a strategic alliance with truck and engine manufacturer Navistar, Caterpillar will, for the first time, offer a self-branded, severe-service, on-highway truck. As jointly announced June 12, the companies have a non-binding memorandum of understanding to pursue on-highway truck business opportunities and cooperate on a variety of diesel engine platforms.
“Concurrent with this new strategic direction, Caterpillar has independently determined that we will not supply an EPA-2010-compliant engine to truck and other on-highway original equipment manufacturers,” says George Taylor, Caterpillar director, global on-highway. “Instead, in North America we will have a Caterpillar vocational construction truck that’s specifically designed to complement the Caterpillar construction equipment line. Our targeted segments initially will include construction, logging, oilfields, low-boy and other vocational markets where we participate.”
The Caterpillar plan heading to the 2010 truck debut, says Taylor, is to leverage Navistar truck design, development and manufacturing with Caterpillar cab design and other equipment technologies. The projection for 2010 is for a Caterpillar-branded diesel engine produced by Navistar.
“This will be a purpose-built truck, differentiated leveraging Caterpillar technologies wherever possible,” says Taylor. “As far as the color, I think yellow sounds good.”
With its trademarked Cat Yellow, Caterpillar is the world’s largest manufacturer of construction and mining equipment, recording 2007 sales and revenues of $44.96 billion.
For Navistar, traditionally concentrated on serving the North American on-highway market with trucks and engines, the alliance offers access to a Caterpillar worldwide dealer network that boasts some 4,700 points of distribution, says Mark Stasell, vice president and general manager, Navistar Truck Group. Of the worldwide market of 1.7 million heavy-duty trucks, North America only represents 17 percent.
Within North America itself, the Caterpillar distribution system will provide Navistar with expanded market reach for severe-service trucks with big bore power, which is “a segment where Navistar has traditionally not been as focused,” says Dee Kapur, president, Navistar Truck Group.
For Caterpillar, the agreement with Navistar will mark a departure from nearly 40 years as an independent supplier of diesel engines to various other on-truck brands.
“The writing’s on the wall for independent engine suppliers,” says Caterpillar’s Taylor. “When you look at an industry that year in and year out runs 240,000 or 250,000 units – and capacity in North America up to nearly 500,000 units – it is going to make it increasingly difficult to participate in the industry as an independent engine supplier. So, we wanted to make sure that we proactively took action before we were in a corner where we had to.”
Caterpillar and its dealers will continue to provide product support and service beyond 2010 for all Caterpillar engines, regardless of the brand of truck, meaning those Cat truck engines in use now and those purchased heading up to the 2010 Cat truck debut will be covered in perpetuity.
“Cat engines can still be purchased and operated with confidence,” says Taylor.
