Step by step, Caterpillar\’s financial leasing strategic in China (2005-9-6)

As the global biggest supplier of heavy duty machinery, Cat is leading on construction machinery, mining equipment, diesel and natural gas engine and industrial gal turbine. In 2003, its global marketing was up to US$22.8 billion. Chinese manufactories and experts always take their eyes on this international giant.
In 1975, Cat provided 38 pipelayers to Petroleum Ministry of China which is the first export to China of heavy duty machinery manufactory of the United States after established diplomatic relations between China and USA.
In 1978, Cat became the first manufactory built parts stockhouse in China. After that, it has been expanding its business in China.
In 2003, Cat wanted to buy Xuzhou Construction Machinery Group which was the largest construction machinery developer and manufactory.
In May 2004, Cat bought out Shandong Construction Machinery Co., Ltd.
To this day, Cat has established 10 production bases and relevant offices.
But, to everyone\’s supervise, in April 2004, Cat (China) financial leasing company was set up intending to make standard of second-hand market and operation process.
Firstly, the establishment of Cat (China) Financial Leasing Ltd. means Cat would decided to implant its globalized distribution dealers network as the financial leasing would service for its dealers. Cat\’s dealers bought products from Cat, which hold ownership and mastery. But they had not to sell competitive products with Cat as well as other products manufactured by other construction machinery manufactories. After start of financial leasing, Cat can provide financing choice for its dealers and consumers with local currency which reduces the cost of financial leasing for consumers and expands its marketing channels largely.
Secondly, the establishment of Cat (China) Financial Leasing Ltd. means Cat had entered and would plan to control the second-hand market of construction machinery and mining equipment in China step by step. With the dealers network, Cat (China) Financial Leasing Ltd. can learn consumers\’ demand and provide equipment leasing at any time; and according to the change of second-hand market, make well the recovery processing of second-hand equipment and grasp new products\’ into market time and price.
At meanwhile, Cat (China) Financial Leasing Ltd. wants to cooperate with the Used Goods Association to make a set of standard second hand market and operation process, to solve the sales of its own used products, and to establish its monopoly situation in the second-hand equipment market. Cat\’s financial leasing strategic starts with standardizing the second hand market, then controls the leasing market step by step, further the new products market, and finally becomes the largest supplier of earthmoving and mining equipment, diesel and natural gas engine, turbine and generator set in China by 2010, with global marketing up to US$30 billion.