Caterpillar’s Financial Services arm to propel its growth in India

December 23, 2019 10:17 pm | Updated 10:17 pm IST - MUMBAI

In five months of starting operations in India in July, 2019, Caterpillar Financial Services Pvt Ltd., the captive licensed NBFC of Caterpillar India, has closed deals with over 100 Caterpillar customers and is now poised to propel the parent company’s growth here, a top executive said.

This is significant given that the growth rate in the India has been slowing quarter on quarter.

“The entry into India is very much based on our outlook for the Indian economy and the infrastructure investment that the government is looking at for the next decade or more,” Christopher Farrar, MD, Caterpillar Financial Services Pvt. Ltd., said in an interview.

“This is the right time for Caterpillar to invest in India. We really see India as a very significant growth market and I suppose it’s an indication for Caterpillar for its long term commitment to India that we come with a full business model, including the captive financing arm,” he said.

“We are here to support Caterpillar dealers, customers with financial services. As customers in India make investments, financing will be extremely important. So bringing that captive model that’s really going to support Caterpillar customer is important. We see Caterpillar Financial as a very important part of the Caterpillar proposition to grow its business in India,” he said.

He said from Caterpillar Financials’ perspective, the demand for construction industry products which are involved in larger infrastructure development of roads, hospitals will grow.

“So, as part of our business model, we see giving customers assistance in the financing of the construction equipment as a key differentiator for Caterpillar. Not everybody in the business has that captive financing arm but the majority of our customers require the financing for such large capital assets. So, the business model for Caterpillar is to really support our customers throughout the whole lifecycle of those products as part of the overall value proposition,” he said.

“We make sure the process is made easy for the customers and then it’s very much about how we can very much support our customers and help them manage risk in product lifecycle in terms of asset risk, cash flow risk,” he added.

Caterpillar Financial globally has a portfolio of $30 billion.

It supports customers in India by offering customised financial solutions for a range of Caterpillar products in India (both domestic and imported) including Equated Monthly Installments (EMI) offerings tailor-made for customers keeping their cash flows requirements in mind.

Caterpillar Inc, with 2018 sales and revenues of $54.722 billion, is a world-leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel-electric locomotives. It provides financing and related services through its financial products segment.

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