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?
Me: OK, moving right along.
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