Caterpillar’s Oberhelman Predicts Growth for Cat Rental Store Program
April 23, 2013
Caterpillar chairman and CEO Doug Oberhelman told a group of journalists at Bauma that Cat will continue its Cat Rental Store business model and try to expand it in many other places in the world.
“The Cat Rental Store program we have today is very successful, it’s the largest single rental company in the world,” Oberhelman said. “If we aggregate all the assets together, or the net worth of that group, somewhere around a third of our assets in construction equipment are in rental and I suspect that rental assets as a percentage of our business will continue to rise. It’s not everywhere yet, it’s not in China yet, so we have lots of places to grow it. We are so well-positioned to take advantage of the growth in rental.”
Oberhelman emphasized at Bauma that there are three main ways Caterpillar is successful — through its vision, its technology and its service. Oberhelman said a company needs to know where it’s going and that while the world currently faces a variety of economic challenges, “we keep a close eye on everything and we’re always ready to respond to just about anything.”
He talked about the importance of the German market. “Some in our industry say German customers can be regarded as demanding,” he said. “Frankly, I like that, and we get our best feedback from our most challenging and demanding customers.” Oberhelman talked about the company’s emphasis on R&D. “We’ve invested much of our R&D budget in projects that meet the needs of our European customers and to meet government requirements in terms of environmental standards.”
Oberhelman said investment in technology is designed to deliver value in three ways. “First we deliver peace of mind through equipment management. Examples are Product Link and VisionLink, which enable capabilities for remote monitoring, tracking, fleet management and preventive maintenance. This really enables our customers to be in two places or multiple places at once, keeping an eye on the job and getting the most value out of their equipment.”
The second value is to deliver productivity through technology on the jobsite itself, enabling customers to improve their bottom line through efficient use of time, safer working conditions, better project cost management and precise job specifications. “When I meet with customers, these are the things they talk to me about most — productivity, safety and cost.”
Oberhelman said his third point is the products themselves that deliver fuel efficiency, productivity and sustainability. Oberhelman was passionate about the company’s new technology, especially its 336EH hybrid excavator that was object of particular attention at Caterpillar’s stand. In addition to developing more conventional technology, Oberhelman said Caterpillar in the past couple of years has invested several million dollars into R&D on natural gas and other alternative-fuel technologies.
Oberhelman expressed optimism about Caterpillar’s mining business and said he was not concerned about short-term dips in that market. “It’s slow right now, but there are 7 billion people on the planet today and there will be 9 billion people in 25 years or so,” he said. “All of those people want to live better and that requires electricity, it requires copper, it requires all the things that come out of the ground. So at some point when things recover, I don’t think that will be in the too-distant future, people will need things from the ground and we intend to be there.”
Oberhelman was similarly optimistic about potential for growth in infrastructure development in North America, despite the current political difficulties. "The demand is huge for infrastructure growth and there will come a time when financing steps up and handles some of that,” he said. “For Congressional and state leaders around the country, that’s one of their number one issues after health care. They realize they have to be competitive with other states and other countries.”
“The Cat Rental Store program we have today is very successful, it’s the largest single rental company in the world,” Oberhelman said. “If we aggregate all the assets together, or the net worth of that group, somewhere around a third of our assets in construction equipment are in rental and I suspect that rental assets as a percentage of our business will continue to rise. It’s not everywhere yet, it’s not in China yet, so we have lots of places to grow it. We are so well-positioned to take advantage of the growth in rental.”
Oberhelman emphasized at Bauma that there are three main ways Caterpillar is successful — through its vision, its technology and its service. Oberhelman said a company needs to know where it’s going and that while the world currently faces a variety of economic challenges, “we keep a close eye on everything and we’re always ready to respond to just about anything.”
He talked about the importance of the German market. “Some in our industry say German customers can be regarded as demanding,” he said. “Frankly, I like that, and we get our best feedback from our most challenging and demanding customers.” Oberhelman talked about the company’s emphasis on R&D. “We’ve invested much of our R&D budget in projects that meet the needs of our European customers and to meet government requirements in terms of environmental standards.”
Oberhelman said investment in technology is designed to deliver value in three ways. “First we deliver peace of mind through equipment management. Examples are Product Link and VisionLink, which enable capabilities for remote monitoring, tracking, fleet management and preventive maintenance. This really enables our customers to be in two places or multiple places at once, keeping an eye on the job and getting the most value out of their equipment.”
The second value is to deliver productivity through technology on the jobsite itself, enabling customers to improve their bottom line through efficient use of time, safer working conditions, better project cost management and precise job specifications. “When I meet with customers, these are the things they talk to me about most — productivity, safety and cost.”
Oberhelman said his third point is the products themselves that deliver fuel efficiency, productivity and sustainability. Oberhelman was passionate about the company’s new technology, especially its 336EH hybrid excavator that was object of particular attention at Caterpillar’s stand. In addition to developing more conventional technology, Oberhelman said Caterpillar in the past couple of years has invested several million dollars into R&D on natural gas and other alternative-fuel technologies.
Oberhelman expressed optimism about Caterpillar’s mining business and said he was not concerned about short-term dips in that market. “It’s slow right now, but there are 7 billion people on the planet today and there will be 9 billion people in 25 years or so,” he said. “All of those people want to live better and that requires electricity, it requires copper, it requires all the things that come out of the ground. So at some point when things recover, I don’t think that will be in the too-distant future, people will need things from the ground and we intend to be there.”
Oberhelman was similarly optimistic about potential for growth in infrastructure development in North America, despite the current political difficulties. "The demand is huge for infrastructure growth and there will come a time when financing steps up and handles some of that,” he said. “For Congressional and state leaders around the country, that’s one of their number one issues after health care. They realize they have to be competitive with other states and other countries.”
