CNH Industrial, a major capital goods company whose subsidiaries manufacturer an expansive range of products from construction and agricultural equipment to trucks and commercial vehicles, is planning to separate its on-highway and off-highway categories into different companies. Details of the plan were provided recently during a capital markets presentation at the New York Stock Exchange.
Equipment World quotes CNH Industrial CEO Hubertus Mühlhäuser as speaking of “a need to focus the organization and sharpen our strategic positioning in order to achieve the full potential of our strategic portfolio.” It was with this goal in mind that CNH decided to split on- and off-highway products into two companies.
“We saw that there was overwhelming synergistic potential between agriculture and construction equipment, and between commercial vehicles and powertrain, given the relative cost share of an engine is higher in trucks than in off-highway equipment,” Mühlhäuser said. “Also, on-highway is typically leading with emission regulation changes, making it critical to our commercial vehicle business.”
The off-highway company will feature construction products, most notably wheel loaders, excavators and compact equipment. These machines are manufactured by CNH subsidiaries Case Construction Equipment and New Holland Construction.
CNH also announced that it would be discontinuing 44 of the 172 construction equipment models it currently offers in North America. But as a spokesperson for Case clarified to Equipment World: “This is not a model elimination as much as a variation elimination. There are not necessarily products or product lines going away, simply the ordering variation (SKUs). It’s also important to note this only affects products manufactured in North America, and not what’s available in North America, i.e. that number is specific to products manufactured in Wichita, Fargo and Burlington.”
The idea is to simplify the customer’s purchasing experience.
“When a customer wants to buy now he has too many alternatives when he can get a similar machine immediately from a competitor,” Mühlhäuser explained. “We want to eliminate the confusion.”