Deere, Hitachi Dissolve 30-Year Excavator Joint Venture

After more than 30 years building excavators together, Hitachi Construction Machinery and John Deere are parting ways.

Hitachi Construction Machinery Dissolves Joint Venture With Deere, Outlines Bold Vision For Hcma In The Americas 01
Need to Know:
  • Hitachi Construction Machinery and Deere are dissolving their joint venture.
  • The two companies plan to continue a working relationship through licensing and supply agreements.
  • Deere will continue to manufacture excavators in the same facilities as it does today.
  • Hitachi Construction Machinery Loaders America Inc. (HCMA) will become the regional headquarters for the Americas for all Hitachi construction machinery products and services as the company plans to expand its offerings and dealer network, with specific focus on the mining market.

Hitachi Construction Machinery (HCM) and Deere have announced plans to dissolve their longstanding joint venture in the Americas. The move comes as Hitachi moves to "determine its own destiny in the Americas," according to HCMA CEO Alan Quinn, with plans for new equipment, technologies and an expanded dealer presence in the Americas.

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The dissolution of the joint venture will be completed Feb. 28, 2022.

At the same time, HCM is announcing that HCMA will assume all product and service operations for the Americas in spring 2022. HCMA will continue to be a wholly-owned subsidiary of the Hitachi Construction Machinery Group.

HCMA is planning to add more than 60 new local positions to strengthen its North American headquarters in Newnan, Ga.

Details from Deere

The origins of Deere and Hitachi's joint venture reach all the way back to an original supply relationship established in the early 1960s. After nearly three decades of working together, the two companies entered the joint venture in 1988, with plans to produce excavators in Kernersville, N.C.

In 1998, Deere-Hitachi expanded the relationship to include the production of forestry swing machines at Deere-Hitachi Specialty Products in Langley, British Columbia, Canada. In 2001, John Deere and Hitachi combined their marketing and distribution efforts in the Americas. In 2011, excavator manufacturing was expanded with the addition of the Deere-Hitachi Brazil factory in Indaiatuba, Brazil.

According to Deere:

  • John Deere will acquire the Deere-Hitachi joint-venture factories in Kernersville, NC; Indaiatuba, Brazil; and Langley, B.C.
  • John Deere will continue to manufacture Deere-branded construction and forestry excavators currently produced at the three Deere-Hitachi factories. These locations will discontinue production of Hitachi-branded excavators. John Deere will continue to offer a full portfolio of excavators through a supply agreement with Hitachi.
  • John Deere's marketing arrangement for Hitachi-branded construction excavators and mining equipment in the Americas will end; Hitachi will assume distribution and support for these products.

"For many years, John Deere and Hitachi enjoyed a mutually successful partnership in the Americas," says John Stone, president, John Deere Construction & Forestry Division and Power Systems. "As we turn the page to a new chapter of Deere-designed excavators, we remain committed to supporting our customers of today and tomorrow."

The agreement is subject to the receipt of certain required regulatory approvals as well as certain other customary closing conditions.


Hitachi Changes

Masaaki Hirose, chairman and HCM executive officer, will continue to be responsible for HCMA. Alan Quinn, who currently serves as CEO, will continue in the same role.

“HCM, through HCMA, will be able to better determine its own destiny in the Americas with its own business strategies, improved products and services, and updated technologies, all provided through a revamped and strengthened distribution network,” Quinn says.

Beginning spring of 2022, HCMA will introduce new equipment to the Americas with technologies that increase efficiency and safety while lowering total cost of ownership.Beginning spring of 2022, HCMA will introduce new equipment to the Americas with technologies that increase efficiency and safety while lowering total cost of ownership.Wayjax

Beginning spring of 2022, HCMA will introduce new equipment to the Americas with technologies that increase efficiency and safety while lowering total cost of ownership. The company plans to differentiate itself through the product capabilities of these new machines, including the latest in hydraulic systems, innovative uptime and IoT services, and advanced safety features. It will also assess the potential for completely new products that meet the needs of the Americas markets.

HCMA will be able to structure its business to respond to market changes and fulfill the evolving needs of equipment owners and operators. In construction, price competition for new machinery from emerging countries is intensifying and demands for improvement in safety and efficiency on job sites are becoming stricter.

Learn more about the Deere-Hitachi partnership:

In mining, competition for hydraulic excavators and dump trucks used in mines has intensified as the global trend to reduce CO2 through automation, unmanned and electrification has increased. In after-sales service, the development of “uptime” services is also growing.

“HCM has been improving and investing in business strategies since 2017 to prepare for the creation of HCMA,” Quinn says. “This includes many ‘value chain’ initiatives to bolster parts and service, rental, used equipment, remanufactured parts and financing. It has also been improving technologies in analytics, IoT, telematics, fleet management and uptime services. In the future, HCMA will be able to better utilize these advances to capture more market share.”

In the short term, all wheel loaders, excavators and mining equipment will be manufactured in Japan. HCM and HCMA will continue to evaluate this supply structure for the future to evaluate the possibilities for production in the Americas.

Hitachi Has Big Plans

One of HCMA’s main strategies will be to increase the usage of ConSite globally. The company will extend the service to new Hitachi brand excavators and continue to expand its use in mining. The goal is to increase the use of telematics and predictive analytics to increase uptime on the jobsite.

HCMA’s other goals include:

  • Strengthen its regional headquarters in the Americas.
  • Formulate new market strategies.
  • Rebuild and strengthen its distribution network in North America.
  • Respond to increased demand from mining and civil engineering for safer equipment that is more productive and reduces total lifecycle costs.
  • Promote sustainable initiatives for manufacturing, construction and mining; reduce dependence on coal-related businesses, reduce CO2 emissions.
  • Continue to aggressively expand into mining, particularly in Latin America.
  • Steadily establish parts service bases.
  • Expand rental and used equipment businesses.

“We are very excited to begin this new chapter as HCMA,” Quinn says. “We have an ambitious plan for the future, and we are focused on dynamically responding to the needs of our customers and the quickly changing nature of the equipment market.”