Exclusive: Deere, Hitachi reveal plans beyond joint venture
By Andy BrownOctober 18, 2021
Positive new opportunities and strategies await both John Deere and Hitachi Construction Machinery in the wake of their ending a decades-long joint venture.
Following the recent announcement that John Deere and Hitachi Construction Machinery are ending their longstanding partnership, both OEMs have revealed their plans going forward and what they might mean to the respective organizations.
The joint venture centered on the manufacture and selling of Hitachi construction equipment in North and South America under the Deere brand. Following the dissolution of the JV, the manufacturers will enter new license and supply agreements which will be effective February 28, 2022 – pending regulatory approval.
A spokesperson for Hitachi Construction Machinery (HCM) commented that, “From next spring, in order to differentiate machinery for John Deere, HCM will introduce the newest models equipped with a new hydraulic system which realizes high efficiency… We will have a lineup of new products and the latest service solutions, and from the first year we will take a certain share of both compact and construction products.”
Hitachi added that the ending of the JV would provide opportunities in the mining sector. “For mining companies, it is urgently necessary for them to change their investment policy towards zero emissions due to the trend of reducing CO2 worldwide.
“HCM’s trolley-type dump truck has an extensive track record of deliveries, mainly in Central Asia and Africa, and it will capture the South American market together with ABB, which has a large share in distribution and electric facilities for mining.”
For its part, John Deere confirmed there would be no impact to the supply of Deere-branded excavators to the U.S., Canada, Latin America and Brazil markets, and that the company sees the development of its excavator lineup as a real opportunity.
“We will be in full control over our excavator journey from design to manufacturing and support; and will now have the capability to leverage technology developed across the enterprise and deliver those advanced features to excavators, strengthening the entire product portfolio,” said Domenic Ruccolo, senior vice president, sales, marketing, and product support, global construction equipment at Wirtgen Group, which was purchased by Deere in 2017. “We’re very excited about the future.”
When asked if Hitachi was in a better position now to expand its global footprint, its spokesperson answered that, “From the viewpoint of globalization, we had a limitation to expand our business strategy. In the Americas, under a JV with Deere, only the supply of products to Deere was possible, and all of the highly profitable parts service and other businesses that had many points of contact with customers were within the scope of Deere’s business, with the exception of the wheel loader business.
“Going forward, HCM plans to expand its business on a consolidated basis by steadily establishing parts and service bases, expanding its rental and used equipment businesses, and investing in dealers sales.”
Talking about the future strategy for Deere, Ruccolo revealed that, “Our strategy will heavily invest in the excavator portfolio, including adapting and integrating technologies that align with our Precision Construction solution initiatives.
“This Smart Industrial strategy builds on John Deere’s fundamental manufacturing strengths and core values, aiming to deliver greater value for customers through our leadership in advanced technologies,” Ruccolo said.