Exclusive: Deere, Hitachi reveal plans beyond joint venture
By Andy Brown07 October 2021
Following the announcement that John Deere and Hitachi Construction Machinery are to end their longstanding joint venture (JV), both OEMs have revealed their plans going forwards and the future opportunities they see this creating.
Part of the multi-decade JV was for the manufacture and selling of Hitachi construction equipment in the Americas under the Deere brand. The manufacturers will enter new license and supply agreements which will be effective February 28, 2022 – pending regulatory approval.
International Construction contacted John Deere and Hitachi to get more information, and to find out what it means for both brands and the global construction market in the future. Both companies spoke positively about the JV but indicated that its ending would lead to new opportunities.
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 realises high efficiency… We will have a line-up 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.”
The OEM also 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.”
John Deere in the Americas
John Deere confirmed that there would be no impact to the supply of Deere branded excavators to the US, Canadian, Latin America, and Brazil markets, and that the company sees the development of its excavator lineup as a real opportunity.
The OEM - which bought German-based Wirtgen Group back in 2017, provided comment through Domenic Ruccolo, senior vice president, sales, marketing, and product support, global construction equipment chief sales officer, Wirtgen Group.
“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…. We’re very excited about the future,” he said.
When asked if Hitachi was in a better position now to expand its global footprint, the spokesperson answered that, “From the view point of globalisation, 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 wheeled 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.”