Caterpillar CEO hoping for sustainable Chinese growth
China: We have to be there - Doug Oberhelman
Caterpillar chief executive Doug Oberhelman says that a continuation of the current single-digit growth in China will make it a more sustainable and “fantastic” market for the world’s biggest selling construction equipment manufacturer.
Growth in the world's second-largest economy decelerated to 7.4% in 2014, its slowest pace in 24 years. That slowdown has caused ripple effects around the globe, hurting commodities, imports and US firms such as Caterpillar, that generate sales in China.
Speaking on CNN, Oberhelman said: "Double-digit growth rates were great, but they can't sustain themselves for 100 years." Oberhelman said he believes a 3% to 5% growth rate is more sustainable.
CNN reports that the slowing economy in China is a big deal for Caterpillar, which generated US$2.6 billion in revenue from the Asia-Pacific region during Q4 2014 alone. This was a 16% decline from the year before.
"I think over time it's going to be a fantastic market there, but they're learning to adjust to cycles -- just like the rest of us," Oberhelman added.
While Caterpillar doesn't need to build out any more capacity in China, Oberhelman said the company continues to strongly compete in what is the largest construction equipment market in the world.
"We have to be there," he said.