Tomahawk, WI 07/14/2014 (Basicsmedia) – General Electric Co. (NYSE:GE) has taken an unmatched lead from Caterpillar Inc. (NYSE:CAT) in a race for producing railroad locomotives which will be based on more firm emission standards taking effect next year. Freight locomotives will not be available till 2017 as said by Caterpillar’s Electro-Motive Diesel unit. Though their demonstration models will be available from early 2015, but don’t expect productions before 2017. Where on the other hand, GE’s locomotives are already in there testing stage and are based on diesel-engine exhaust regulations taking effect from the first week of January.
A pollution-reduction system has been added additionally by General Electric Co. (NYSE:GE) to its already existing locomotive engine and has also promised to start full scale production from next summer.
Caterpillar feels proud for building better and higher horsepower diesel engines for off-road vehicles and industrial uses. But now is lacking speed or activeness in their efforts. Their demand in the market has not been very stable. On the other hand GE has about 60% – 70% of the U.S. locomotive market. Also the two years’ absence of Electro-Motive’s from the market will surely help GE to make a strong lead ahead.
Reasons For Caterpillar’s Trail
Wrong market analysis for the delayed need of locomotives of newer engines by railroads could be a prominent reason.
Their Slow efforts also lead to the gap being created between both the companies’ production times.
The number of units that U.S. cargo locomotive produced ranged up to 1000. But this year they have already produced 1300 units till date. It is the highest anyone has produced after 2008 recession.
The only way Caterpillar can come out for sustaining in future in U.S. market is relying on their overseas sale. Their estimated overseas sales make up about 30% of their overall annual sales.
Caterpillar’s uncertain slow movements could give rise to some another locomotive manufacturer to fill the space left by them to compete with General Electric Co. (NYSE:GE).