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Many markets are characterised by rival manufacturers battling for market dominance, Apple and Microsoft, Pepsi and Coke, Ryanair and Easyjet, to name a few.
But rarely have two companies’ fortunes been quite so interlinked as Caterpillar and Komatsu. Named after the Japanese city of Komatsu (the name translates as “little pine tree”) Komatsu Iron Works separated from Takeuchi Mining Co. in 1921 to become Komatsu Ltd.
Caterpillar Inc. was actually founded four years later in 1925 when the Holt Manufacturing Co. and the C. L. Best Tractor Co. merged to form Caterpillar Tractor Co. The company aimed to be the leader in providing the best value in machines, engines and support services for customers dedicated to building the world’s infrastructure, and developing and transporting its resources.
Komatsu produced its first agricultural tractor prototype in 1931. Through the 1930s, Komatsu also produced tractors for the Japanese military, as well as bulldozers, tanks and howitzers.
At the outbreak of World War II, Caterpillar track-type tractors, motor graders, generators sets, and a special engine for the M4 tank were bought in great quantities by the U.S. in its war effort. After the war, under its new president Yoshinari Kawai, Komatsu added non-military bulldozers and forklifts to its line of equipment.
And so both businesses continued, with Komatsu exports growing despite post-war ill feeling towards the Japanese and Caterpillar expanding into Europe. Both attacked one another’s home markets in the 1960s.
Komatsu_LPG_forkliftCaterpillar decided to penetrate the Japanese market through a joint venture with Mitsubishi in 1965. The result was one of the first joint ventures in Japan to include partial U.S. ownership. The venture also began the process which eventually led to the formation of MCF and MCFE in 1992. The joint venture combined a variety of operational strengths. Mitsubishi providing manufacturing, engineering and proprietary design knowledge, Caterpillar Inc. bringing marketing experience, a dealer organization, brand recognition and product support. In 1983 the Korean-firm Daewoo also reached a 10-year agreement to build forklift trucks under the Caterpillar brand. This led to the creation by Daewoo of its own forklift brand in the 1990s, which, following the sale of Korean Government owned shares in 2005, became Doosan.
The Caterpillar/Mitsubishi venture prompted Komatsu to expand into other markets and set up assembly plants in places like Brazil and Mexico.
In July 1967, Komatsu entered the U.S. market under the company slogan of “Maru-C”, translating into English as “encircle Caterpillar” taken from the game of Go, where encircling an opponent results in capture of their territory. By the mid-1970s Komatsu had increased its global market share significantly (around which time Windsor first established our own relationship with the company) and maintained a majority market share in its home territory. Almost 20 years of incredible growth was only curtailed by a recession and difficulties in the Asia market. By 1981, Komatsu was awarded the Japan Quality Control Prize, a globally supreme quality-control honour.