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Construction, mining and energy, and transportation equipment manufacturer Caterpillar Inc sees India as a bright spot among global markets which are stagnant or shrinking.
Caterpillar’s revenues shrank 14 per cent in 2015 to $47 billion, leading it to shut 20 factories around the world.
However, in India, the company plans to expand its manufacturing, dealership network and increase research & development activities to tap into the growth opportunities in the country.
“Our growth regions keep changing rapidly…but India is a bright spot. The year-on-year growth in revenues from India has been about 30-35 per cent in the first quarter of 2016. It is on a lower base but it is the fastest growing major market for us. We look what the government is talking about in terms of infrastructure and we don’t see that sort of demand anywhere else,” said Tom Pellette, Global Group President, Caterpillar Inc.
“There has been an incredible drop off in the machinery industry in China. From the peak of 2011-12 to last year, the drop was about 80 per cent. The rest of the Asia Pacific was stable, Europe was stable, in the Middle East there was a drop because of the falling oil prices and the political problems has led to a weakness in Brazil,” he added.
Pellette said Caterpillar’s future engagements and investments in India will revolve around increasing manufacturing, raising the number of dealerships and more research and development.
“This will be India’s decade if not the century. We already have five factories here. We will continue to expand the product lines here to not just serve the local market but also the export market,” he said.
The company has already invested $500 million in India so far. Pellette did not give any further investment details.
Vivekanand Vanmeeganathan, Managing Director, Caterpillar India, added that while the company cut jobs globally, India is one of the few places where headcount has grown.
“We have two R&D facilities in India and the purpose of these facilities is not just to cater to the local market, but also the global product line. So, while we do have a significant footprint here, we would continue to look at opportunities to expand it,” he added.
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