Caterpillar Inc. says it will discontinue production of its Cat Truck on-highway vocational trucks, blaming "the current business climate in the truck industry" for its withdrawal from the market.
“This is also in line with the company's ongoing restructuring to align its businesses with existing conditions,” the company said in a statement issued today. Those previously announced moves include personnel layoffs and cutbacks in production of its earth moving and material handling equipment.
“As a result of this action, the company will cease taking new orders for vocational trucks, although Caterpillar remains committed to existing truck customers and will support the existing trucks currently on the road,” the company said.
Caterpillar launched its first CT vocational truck in the North American market in 2011, working with Navistar on the product's design and build. It was based on the International PayStar and built under contract by Navistar, and now includes three variants.
Last year, Caterpillar announced its intention to begin independently designing and manufacturing its on-road vocational truck products at a plant in Victoria, Texas. That was to phase in this year.
Cat Trucks, designated CT, are premium products based on Navistar International's PayStar and use a Navistar-built 12.4-liter diesel. They are assembled at a Navistar plant in Saltillo, Mexico. CT sales volume remains low, annually totaling 1,100 to 1,200 units, a Navistar spokesman said last year.
Navistar meanwhile introduced an upscale version of its PayStar vocational truck, called HX, which resembles and would have competed with the Cat Truck series.
"Remaining a viable competitor in this market would require significant additional investment to develop and launch a complete portfolio of trucks, and upon an updated review, we determined there was not a sufficient market opportunity to justify the investment," said Ramin Younessi, vice president of Caterpillar's Industrial Power Systems Division.
"We have not yet started truck production in Victoria, and this decision allows us to exit this business before the transition occurs."
Canceling the CT program will impact approximately 70 positions, Cat said. The reductions will begin in March and will take place over a period of time.