Success StoriesーOther Manufacturing

Caterpillar Japan Ltd.

Caterpillar Japan Ltd., the Japanese subsidiary of global construction-machinery
manufacturer Caterpillar Inc. in the US, researches, develops and manufactures
hydraulic excavators at their Akashi Campus in Hyogo Prefecture. The Akashi
Campus is a key base for the Caterpillar group in this field, being comprised of
the Hydraulic Excavator Development Center (HEDC), a global development
base for the group’s hydraulic excavator division, and the Akashi Plant, a mother
factory for its excavator business.

The US-based Caterpillar Inc. is a global Caterpillar’s entry into Japan began in 1963,
manufacturer which has been engaged in the when Mitsubishi Heavy Industries (then Shin
development and manufacture of Mitsubishi Heavy Industries) and Caterpillar
construction machinery, mining machinery, set up Caterpillar Mitsubishi Ltd. in
diesel and natural gas engines, commercial Sagamihara City, Kanagawa Prefecture under
gas turbines and diesel electric locomotives equal ownership.
since its establishment in 1925. The company Already active in the construction
continues to grow in the global construction machinery industry since before the joint
machinery industry, supplying more than 300 company was established, Mitsubishi Heavy
products to its customers in over 180 Industries had opened a special plant in 1960
countries, chalking up sales of 47 billion for construction machinery on the site owned
dollars in 2015, and employing more than by its Kobe Shipyard & Machinery Works,
100,000 people across the globe. where it produced the “Y35,” the first
Caterpillar Japan Ltd., the Japanese arm of domestic hydraulic excavator in Japan. That
Caterpillar, has about 2,100 employees in site would become a prototype for the Akashi
total at its Tokyo headquarters, the Akashi Campus of the current Caterpillar Japan.
Campus in Hyogo Prefecture - a global base Starting its business during a period of high
for the group’s hydraulic excavator division - economic growth which saw a boom in
and the Sagamihara Plant in Kanagawa construction, Caterpillar Mitsubishi increased
Prefecture, which develops and manufactures its earnings without a hitch through
hydraulic equipment. It is also the largest manufacturing bulldozers and wheel loaders.
company in the Japanese construction In 1987, Caterpillar Mitsubishi and the Akashi
machinery sector, possessing multiple Plant of Mitsubishi Heavy Industries merged
affiliated companies under the collective into Shin Caterpillar Mitsubishi Ltd. This new
name Caterpillar Japan Group, which are company would expand the hydraulic
responsible for sections such as the Sales excavator business by beginning production
Division and the Chichibu Visitor Center for of the “E200B,” the first hydraulic excavator
product demonstrations. under the Caterpillar brand.
While Shin Caterpillar Mitsubishi’s business
remained strong after its establishment, the
situation in the construction machinery
industry began to change due to a slowdown
Background of Caterpillar Japan's in the domestic construction machinery
establishment market and the rise of the market in China.

Copyright (C) 2016 Japan External Trade Organization (JETRO). All rights reserved.
 Success StoriesーOther Manufacturing

For this reason, Mitsubishi Heavy Industries putting our energies into the research and
decided to withdraw from the construction development of the next-generation of
machinery business. This led to Caterpillar in hydraulic excavators capable of meeting the
the US raising the percentage of its stake in requirements of any country. Under our
2008, and the company was renamed slogan, ‘Showing Akashi’s Strength to the
Caterpillar Japan Ltd., as it remains today. In World!’ we are proud of playing a pivotal role
2012, Caterpillar assumed 100% ownership in Caterpillar’s worldwide hydraulic excavator
and began sole administration of the business.”
Japanese subsidiary's bases, including Akashi Caterpillar Japan was selected for the 2014
Campus. Subsidy Program for Projects Promoting
Foreign Direct Investment, Site Location and
Regional Development in Japan (also known
as the Project for Site Location for Global
Companies), sponsored by the Ministry of
Economy, Trade and Industry. Mr. Toyoura
says, “With this subsidy program, we were
able to establish a software development
base for hydraulic excavator development and
build a vehicle testing site for hydraulic
Caterpillar’s hydraulic excavator CAT320E excavators. The existence of this program
helped us convince our head office of the plan.
Akashi Campus, a global base for We are thankful for this program.”
hydraulic excavators
Caterpillar Japan’s Akashi Campus is a plant Advantage of Caterpillar: Win-win
dedicated to hydraulic excavators, which relationship with business partners
incorporates the Akashi Plant, a production Mr. Toyoura explains that Caterpillar’s
division and the Hydraulic Excavator advantage “is one of win-win mutual trust
Development Center (HEDC) on a site that is with dealers and suppliers that enables us to
about 210,000 square meters. Regarding the continuously improve our product quality.” He
Akashi Campus, known as the lynchpin for continues, “Most of our customers both in
Caterpillar's global hydraulic excavator Japan and overseas have long been using our
production, Nobumi Toyoura, Operating products and are familiar with their quality
Director and Technical Services Manager of and operability as well as our company's
the HEDC Excavation Division, explains: “We productivity. Therefore, their comments are
have set up a framework that has integrated indispensable for our quality improvement
the development and production of hydraulic and product development. We benefit from
excavators from small to large. We also our dealers’ networking, which allows
provide designs and drawings to all of customer input to reach our manufacturing
Caterpillar’s hydraulic excavator production and development divisions. I believe this is an
plants around the world. Pursuing uniform advantage unique to our company with its
design on a global scale, we work to improve worldwide presence. Our company designs
business efficiency while maintaining the products taking into consideration profitability
highest quality for the entire group. We also as well as how our dealers can swiftly and
regard it important to localize our products, accurately provide customers with

Copyright (C) 2016 Japan External Trade Organization (JETRO). All rights reserved.
 Success StoriesーOther Manufacturing

maintenance services in the aftermarket area. plant tours, VR experience workshops and
We also highly value the attitude of growing workplace visits for preschool children so that
together with one's suppliers instead of they will become familiar with our company
looking out for one's own profit alone. For this and work. Other essential matters we are
reason, we have heavily invested in building working on include setting up a day-care
mutual trust with our business partners. A facility in the company to improve the
win-win relationship with one's partners working environment for our female
contributes to enhanced customer employees, as well as creating an
satisfaction and the development of new environment in which foreign engineers can
products. This has been Caterpillar’s business comfortably work.
model since its foundation.

Reason for continuing development in

Japan and future outlook
Mr. Toyoura explains the reason why
Caterpillar continues its development in Japan,
saying, “Although Japan’s share of the global
construction machinery market has been
shrinking, it still has many key players and
they have an abundance of the kind of
knowledge needed for product development.
Having a presence in Japan is therefore a
significant advantage for us.”
Caterpillar is now the focus of attention Mr. Toyoura

with a series of announcements, including Operating Director and Technical Services Manager of HEDC

regarding its response to emission restrictions Excavation Division

in Japan by equipping excavators with a

device for reducing NOx (nitrogen oxide), and JETRO's support
the release of the latest model of hydraulic JETRO provided Caterpillar Japan with
excavators that utilize IoT. Regarding the various forms of information when the
company’s outlook, Mr. Toyoura says, “To company applied for the 2014 Subsidy
continue being the No. 1 company in the Program for Projects Promoting Foreign
world, we are working hard in recruitment in Direct Investment, Site Location and Regional
addition to product development. Even Development in Japan. Mr. Toyoura
though we have adopted cutting-edge virtual comments, “Thanks to JETRO, we were able
reality (VR) devices for more accuracy, in the to solve problems which would have been
end it is people who must operate these impossible on our own and smoothly carry
devices. Being a foreign-owned company, out procedures. We are truly thankful for
Caterpillar has a lower profile than Japanese JETRO’s active support and hope to be able to
companies, which poses an obstacle to our continue relying on them for advice and
recruitment activities. To turn this situation information in the future as well.”
around, we regularly hold such events as (September 2016 Interview)

Copyright (C) 2016 Japan External Trade Organization (JETRO). All rights reserved.
 Success StoriesーOther Manufacturing

Corporate history

1925 Caterpillar Inc. established in the US 1987 Shin Caterpillar Mitsubishi Ltd. established
1960 First domestic hydraulic excavator Y35 after merger of Caterpillar Mitsubishi Ltd. and
produced at Akashi Plant of Mitsubishi Heavy Akashi Plant of Mitsubishi Heavy Industries.
Industries (then Shin Mitsubishi Heavy First hydraulic excavators under the
Industries) Caterpillar brand produced.
1963 Caterpillar Mitsubishi Ltd. established as joint 2008 Renamed Caterpillar Japan Ltd.
company of Caterpillar and Mitsubishi Heavy 2012 Start of management by Caterpillar on its
Industries own

Caterpillar Japan Ltd.

Establishment: 1963
Business: Development and manufacturing of construction machinery (hydraulic excavators, etc.)
Parent company: Caterpillar Inc.
Address： (Head office) 4-10-1 Yoga, Setagaya-ku, Tokyo, Postal code: 158-8530
URL: http://www.caterpillar.com/en.html

JETRO’s support

- Provision of information on incentives

Copyright (C) 2016 Japan External Trade Organization (JETRO). All rights reserved.