Hitachi-Deere joint venture officially dissolved

A John Deere excavator

The joint venture between John Deere and Hitachi Construction Machinery has officially ended with the two OEMs now offering some competing products in the Americas.

For the foreesable future, Hitachi will supply Deere with whole goods excavators, components and parts under a new OEM supply agreement.

Since the announcement that the joint venture would end, back in August 2021, both companies have implemented significant changes. 

Hitachi reorganised its independent sales and service network in preparation for the commencement of sales and service on March 1, 2022.

Hitachi Construction Loaders America, which has been in charge of the manufacture and sales of Hitachi brand wheeled loaders in North America, was renamed as Hitachi Construction Machinery Americas (HCMA).

Sonosuke Ishii, Senior Vice President and Executive Officer and President of the Mining Group, has assumed the position as the head of Americas Division and Chairman and Director of HCMA.

New license and supply agreements

John Deere has acquired full ownership of three Deere-Hitachi joint venture factories and has begun new license and supply agreements with Hitachi Construction Machinery. The factories – based in the US, Brazil and Canada – will continue to manufacture Deere-branded construction excavators and forestry equipment; they will discontinue production of Hitachi-branded products.

A ZX350 from the Hitachi Zaxis range

John Stone, president, John Deere Construction and Forestry Division and Power Systems, said, “Going forward, we can leverage technology developed for other product lines and production systems across the Deere enterprise and extend those advanced solutions to Deere-designed excavators, strengthening the entire product portfolio.”

Hitachi Construction Machinery is under new controlling ownership following Hitachi’s sale of 26% of its holding - valued at US$1.6 billion - to Japanese trading company Itochu and private equity firm Japan International Partners. Hitachi’s stake is now 25.4%, with Itochu and JIP jointly owning a 26% controlling share.

In a statement given to International Construction magazine regarding future opportunities, Hitachi commented that, “HCM intends to strive to achieve sufficient returns for investors by developing its own business strategy, improving business performance, and realising medium-to long-term business growth and increased corporate value.

“Therefore, HCM intends to use this as an opportunity to further accelerate its business strategy. By strengthening its collaboration with Itochu Corporation, we hope that we will utilise its global network, abundant experience, and resources to support the early launch and subsequent enhancement of our North American businesses after the dissolution of the joint venture with Deere.”

Hitachi noted that the rental channel was “very important” and added that there is no decision yet on how Itochu-owned Multiquip might be used as a sales channel for Hitachi equipment.