Faced with pressure from Chinese counterparts to produce more and more mature products, Caterpillar, the world's largest engineering machinery manufacturer, plans to transfer parts and components production bases to China to increase its competitiveness in China.

Rich Lavin, Caterpillar's emerging market executive, recently said that Caterpillar plans to transfer as much of its Chinese factory's complex parts as possible from Japan to China.

About 40% of the components of this giant's excavator plant in China are imported from Japan, but it is planned to reduce this proportion by at least 25% in five years as the first step in a larger-scale transfer plan. Rich Levin said that the speed of the transition from Japan to China will depend on the ability of China's supply base to improve. With the ability of Chinese supply bases to display more complex parts, the company will reduce Japan's production capacity. , increase China's production capacity.

On June 29, 2010, Caterpillar announced plans to expand its excavator plant in Xuzhou. The expansion plan will be completed in 2014, when Caterpillar's excavator production capacity in China will expand by 4 times.

In addition, the new hydraulic excavator factory in Wujiang, Jiangsu Province is scheduled to start production in 2012, and Tianjin’s large engine factory is scheduled to start production in 2013.

The key components of China's construction machinery, such as hydraulic components, transmission systems, and engines, rely heavily on imports. The cost of importing key components of construction machinery hosts accounts for more than 40% of the manufacturing cost. Nearly 70% of the profits of the industry are occupied by imported components.

For a long time, relying on imports of core components has become a bottleneck restricting the development of China's construction machinery industry. However, with the development of the Chinese construction machinery industry becoming more and more mature, Xugong, Sany Group, Zoomlion and some other industry leading enterprises have begun to engage in the R&D and production of core components. This gradually threatens Caterpillar.

Rich Levin stated that Caterpillar is conducting pilot projects with Chinese suppliers to assess their ability to produce the complex components currently imported from Japan.

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