Standing its ground: Hitachi stakes its claim on American markets
By Jenny LescohierJune 01, 2022
The recent and amicable split between Hitachi Construction Equipment and John Deere has been a hot topic since the companies announced their plan last August to end the joint venture that dates back to 2000. Questions in North America have centered primarily on what the change will mean to the brands equipment buyers and dealers have come to know.
The joint venture officially ended on March 1, and what is now known as Hitachi Construction Machinery Americas (HCMA) held its first press briefing last month to not only clarify the brand’s direction in the U.S., but also to introduce three new excavators, including the 163-hp, 50,265-lb. ZX210LC-6 HP.
To shed some light on where HCMA sees itself positioned in the market, we talked to Simon Wilson, vice president of sales for HCMA.
CONEXPO-CON/AGG 365: Tell us the story of the Hitachi brand in North America.
Wilson: In 1988, Hitachi started producing machines. John Deere needed a partner to produce top-of-the-line excavators and Hitachi was perfect.
At that time, Hitachi was managing marketing and sales, while Deere was managing its own, but it was the same machine, just different colors and different
Then in 2000, Hitachi and Deere decided to take the partnership to the next level. Instead of Hitachi managing the dealer network, distribution and trying to push sales - because it started to be competitive - Deere took that responsibility on.
So Deere took over Hitachi sales and marketing, but manufacturing stayed the same. Meanwhile, Deere built manufacturing plants in North and South America.
Hitachi and Deere operated together in a 50-50 joint venture. On the production side, manufacturing was 50% Hitachi and 50% John Deere. Hitachi provided all the engineering and the manufacturing expertise, while John Deere provided all the sales and dealer distribution.
CONEXPO-CON/AGG 365: When did things change?
Wilson: In 2015, the discussion began around Hitachi’s position that they could begin to do both manufacturing and sales and marketing. The brand had gotten a lot stronger globally and they wanted to see it continue to grow.
John Deere was also looking in different directions, so the discussion of separating continued until August of 2021 when the decision to dissolve the joint venture was announced.
It wasn’t acrimonious in any way, it was more a question of how do we split and what makes the most sense?
CONEXPO-CON/AGG 365: What was decided?
Wilson: John Deere purchased the manufacturing facilities and Hitachi announced that, effective March 1, they’d manage their own sales and distribution.
CONEXPO-CON/AGG 365: What does this mean to the people who own equipment?
Wilson: We’ve had Hitachi customers say there are things they like about the Hitachi machines. For example, even though Deere and Hitachi machines were manufactured the same, the engines were different.
A lot of them said, “We love the Hitachi machine and great, now we can deal directly with Hitachi,” versus having to talk to somebody from John Deere, who then had to talk to someone at Hitachi. It’s more direct.
The John Deere customers are working with their dealers and their distribution, and they’re purchasing a John Deere for a reason.
For us, the ability to compete, take the Hitachi product and say, “This is who we are, this is what we do. This is how we talk to our customers, how we engage with them and listen to them.” That’s the Hitachi piece we want to bring to the market.
How John Deere wants to do it is in their full control. The product, while for a period of time will still come from Hitachi, may change as John Deere decides what direction they’d like to go.
There’s no public timeframe for that. Today, the supply agreement says Hitachi will supply product as required by John Deere. At some point, things will change, but right now, John Deere can make its own path with its excavator, and Hitachi can make its own path with its excavator.
CONEXPO-CON/AGG 365: What do you see in the future for the two competing brands?
Wilson: We are competitors and the product is already differentiated. Our customers are asking for certain things, and I’m sure Deere customers will ask for different things from them. That’s the good part about our business and our industry: Customers get to choose where to go. It’s for us to earn that business as we go forward.
We believe our product is the best in the world. As the largest manufacturer of excavators, we have a lot of knowledge and for us to be able to talk to the customers about that and listen to what else the customers want, that’s the fun part. Earning their business and their trust is really what it comes down to.
CONEXPO-CON/AGG 365: How will distribution work in North America?
Wilson: There will be 25 dealer groups and as of March 1, we had half of them ready to go. The other half are in process through the remainder of 2022 as we get ready for the 2023 marketplace and the CONEXPO-CON/AGG launch. It’s going to be a big show for us.
These are very large, sometimes very well-known dealer groups that have approached us and asked to represent Hitachi.
CONEXPO-CON/AGG 365: Can you give us a hint at what we can look forward to from Hitachi at CONEXPO-CON/AGG?
Wilson: CONEXPO-CON/AGG is really the first time North America and South America can see the complete HCMA Americas group as we go forward. We’ll show off some innovation, some new products and some things that will be a little different than in the past.
It’s going to be a very exciting time with a lot of new products. It’s a perfect opportunity to meet thousands of customers and potential customers and let people learn about what we do.
CONEXPO-CON/AGG 365: What do you see in the next five years for HCMA?
Wilson: There’s a long-range plan that goes beyond five years, but simply put, we really want to do what we’re doing today, and we want to do it the best that we can. We believe we’re a top-three player in North America in the construction market.
We also have a leadership position in large mining shovels; we are still the market leader in the Americas. We want to retain that. The other component is building our mining business with trucks and some of the peripheral products. The South American market is very key to the mining business and our goal is to be really solid in the mining business.
We want to be that that reliable partner. We want to do what we do and do it the best way we can and have our customers recognize that.
CONEXPO-CON/AGG 365: Anything else you’d like to say to North American contractors?
Wilson: While there’s a lot of news around Hitachi right now, we’re not new. We’ve been here in the Americas for more than seven years. While Hitachi was a smaller brand over the last 20 years, the product is a market leader.
We’re proud of what we do and we want to reintroduce people to Hitachi. Ultimately, we want to find solutions for our customers.