Growing the Remanufacturing Business At Caterpillar India

Abstract

The remanufacturing business is in its infancy in India. There is lack of awareness regarding remanufacturing which is often used interchangeably to mention second-hand or used goods. Moreover, the government has not been greatly supportive towards this industry. Amidst this scenario, Caterpillar, a global behemoth is trying to establish and grow its remanufacturing business in the country. After protracted efforts spanning more than a year which included heavy lobbying with the government of India regarding the misconceived perception of remanufacture, the government allowed Caterpillar to import remanufactured goods into India. Though Caterpillar has been able to remove a major roadblock in setting up the remanufacturing business in India, there is still a long way to go towards establishing the business in India. Caterpillar has set a very aggressive and ambitious target of increasing the share of remanufactured parts in India to around 10% of total parts sales over the next 4-5 years from the present 1.5%. There are multiple strategic and operational issues which Caterpillar needs to look at in order to meet its target. What should the business model be so that the remanufacturing business can grow without cannibalizing the sales of new parts of Caterpillar? What sort of promotional campaigns should be launched and how should Caterpillar connect its customers and dealers?