Caterpillar operates in three principal lines of business:
Machinery - design, manufacture and marketing of construction, mining, agricultural
and forestry machinery - track and wheel tractors, track and wheel loaders,
pipelayers, motor graders, wheel tractor-scrapers, track and wheel excavators,
backhoe loaders, mining shovels, log skidders, log loaders, off-highway trucks,
articulated trucks, paving products, telescopic handlers, skid steer loaders
and related parts. Also includes logistics services for other companies.
Engines - design, manufacture and marketing of engines for Caterpillar machinery,
electric power generation systems; on-highway vehicles and locomotives; marine,
petroleum, construction, industrial, agricultural and other applications; and
related parts. Reciprocating engines meet power needs ranging from 5 to over
22,000 horsepower (4 to over 16'200 kilowatts). Turbines range from 1,600 to
19,500 horsepower (1 000 to 14 500 kilowatts).
Financial Products - consists primarily of Caterpillar Financial Services Corporation
(Cat Financial), Caterpillar Insurance Holdings, Inc. (Cat Insurance) and their
subsidiaries. Cat Financial provides a wide range of financing alternatives
for Caterpillar machinery and engines, Solar gas turbines, as well as other
equipment and marine vessels. Cat Financial also extends loans to customers
and dealers. Cat Insurance provides various forms of insurance to customers
and dealers to help support the purchase and lease of our equipment.
Caterpillar is the leader in construction and mining equipment, diesel and natural
gas engines and industrial gas turbines in our size range. Caterpillar is also
a leading U.S. exporter, with more than half of its sales outside the United
States. Through a global network of independent dealers, Caterpillar builds
long-term relationships with customers around the world. For over 75 years,
the Caterpillar name has been associated with the highest level of quality products
and services.
The competitive environment for Caterpillars machinery business consists of
global competitors, regional competitors, and specialized local competitors.
Principal global competitors include Komatsu, Volvo Construction Equipment,
CNH Global, Hitachi Construction Machinery, John Deere, Terex, JCB, and Ingersoll-Rand.
Each has particular regional pockets of strength. John Deere Construction and
Forestry Division, for example, is a principal competitor in the Americas. Some
competitors have broad ranges of product competitive to Caterpillar. Others,
like Ingersoll-Rand, only offer limited product that is competitive to Caterpillar.
The machinery business in total has been characterized in recent years by consolidations,
marketing alliances, and overcapacity resulting in strong competition and difficult
financial conditions.
Caterpillar operates in a very highly competitive engine/turbine manufacturing
and packaging environment. The company manufactures diesel, heavy fuel and natural
gas reciprocating engines for the on- and off-highway mobile markets and a wide
array of stationary applications, and industrial turbines for the oil &
gas and power generation applications. In North America, on-highway diesel engine
competitors include Cummins Inc., Volvo Group AB, Mack Trucks, Inc. (part of
Volvo), Detroit Diesel Corporation and Mercedes Benz (both part of DaimlerChrysler
Corporation) and Navistar International Corporation. Overseas on-highway diesel
engine competitors include Mercedes Benz (part of DaimlerChrysler Corporation),
Volvo, Mitsubishi Heavy Industries, Scania, MAN B&W, Iveco Diesel Engines,
Isuzu Motors, Ltd., Hino Motors and MWM Brazil.
North America off-highway mobile and stationary application diesel and natural
gas engine/turbine competitors include Cummins Inc., John Deere Power Systems,
Ford Power Products, GE, and Waukesha. Overseas off-highway mobile and stationary
application diesel, natural gas and heavy-fuel engine/turbine competitors include
Wartsila NSD, MAN B&W, MTU Friedrichshafen (part of DaimlerChrysler), Volvo
Penta (part of Volvo), Mitsubishi Heavy Industries, Deutz, Daewoo, Jenbacher,
Kubota, Isuzu, Kawasaki Heavy Industries, Yanmar, Bergen (part of Rolls Royce),
and Alstom.
Electric power packaging and other engine/turbine-related packaging business
remained fragmented. North American packagers include GE, Cummins, Kohler, Katolight,
Generac, Multiquip, Detroit Diesel, Stuart & Stevenson, Hanover, and other
regional packagers. Overseas packagers include Alstom, Rolls Royce, Wartsila
NSD, MAN B&W, Jenbacher, SDMO, Himoinsa, Mitsubishi Heavy Industries, Daewoo,
Denyo, Atlas Copco, Kawasaki Heavy Industries and many other local and regional
packagers dispersed around the world. These packagers leveraged engine/turbine
over-capacity and off-the-shelf technology to expand operations and product
lines, and to enter new markets. They also used flexible/global sourcing and
flexible distribution channels to reach new customers, maximize volumes and
keep costs down.