Quantcast

 

Home Research More Notes from China: Lost in Collusion
formats

More Notes from China: Lost in Collusion

Published on October 22, 2009 by in Research

Held a meeting with the CFO of one of the largest construction equipment manufacturers in China. Their main business is wheel loaders.

Me: You and your competitors have very high margins, some are even higher than Catepillar (NYSE: CAT) which is the global leader. Is there any risk that as you all add capacity those margins decline?

Chinese CFO (through tanslator): Uh so he says that there is no risk of a pricing war.

Me: Ok can you tell me why that is?

Chinese CFO: Uh so he says China has 5 main wheel loader companies. And all are good companies and will not start a price war. Also he says the 5 CEOs of the companies meet every month for a dinner and they all agree not to make a price war against each other.

Me (to the translator): Did he really say that?

Translator: Yes.

Me: OK, moving right along.

Share This, Please
Related Reseach:

 
 Share on Facebook Share on Twitter Share on Reddit Share on LinkedIn
2 Comments  comments