When Caterpillar, the world’s largest producer of earthmoving equipment, opened its first joint venture in China in 1994, the country was still among the poorest in the world in terms of gross domestic product per capita, and bicycles, not cars, dominated the streets of Beijing and Shanghai.
Fast forward to today, when China is the world’s biggest market for machinery, accounting for about 9 per cent of Caterpillar’s annual revenues.
While many global brands have struggled in China’s consumer sector, Caterpillar has been relatively successful so far in maintaining its grip on China’s premium machinery market. A string of recent high-profile pullbacks by multinationals include Mattel’s closure of its flagship Barbie store in Shanghai, along with store closures by Best Buy and Home Depot.