On August 19, 2021, John Deere and Hitachi construction machinery announced that they would terminate the long-term joint venture manufacturing and marketing agreement and terminate the joint venture relationship.
Over the years, John Deere and Hitachi construction machinery have enjoyed a mutually beneficial partnership in the Americas. The two companies established a supply relationship as early as the early 1960s. In 1988, the two companies established a Deere Hitachi manufacturing joint venture in kensville, North Carolina to produce excavators. In 1998, the partnership was expanded to produce forestry cantilever machines at a joint venture plant in Langley, British Columbia. In 2001, the two sides merged their marketing and distribution work in the Americas. In 2011, they also increased their excavator manufacturing business in Brazil.
The two parties sign a new agreement, which will enter into force on February 28, 2022 (depending on the approval of the regulatory authorities). The main contents are as follows:
John Deere will acquire three joint venture plants located in kenasville, North Carolina, indayatuba, Brazil and British Columbia, Canada. John Deere will continue to manufacture John Deere brand excavators in the above three factories, and Hitachi brand excavators will be stopped in these locations.
Hitachi construction machinery will provide John Deere with OEM supply of small excavators of John Deere brand and a complete lineup of current hydraulic excavators. And provide parts and service parts for John Deere's manufacturing and distribution bases in the United States and Brazil in the foreseeable future.
After the dissolution of the joint venture, from March 2022, Hitachi construction machinery will sell excavators and mining machinery in the Americas through its own independent dealer network. Its current loading production and distribution base, Hitachi construction machinery loader America, will become the hub of Hitachi construction machinery in the United States.
Hitachi construction machinery also revealed that while utilizing and strengthening the existing marketing network of Hitachi construction machinery brand hydraulic excavators, mining dump trucks and wheel loaders, it will establish an optimal marketing and service network in the whole North American, central and South American markets.
Hitachi construction machinery said that the termination of the joint venture is taking into account the latest changes in the business environment around the joint venture. After full discussion, the two sides make their own decision to independently implement the growth strategy, which will bring new opportunities to everyone.
Hitachi construction machinery plans to expand its business on the basis of merger by steadily establishing parts and service bases, expanding leasing and second-hand equipment business and investing in the dealer team.
A spokesman for Hitachi construction machinery said, "from the spring of next year (2022), Hitachi construction machinery will launch new product models matching new hydraulic systems and higher efficiency... We will have a series of new products and the latest service solutions, and will occupy a certain share in compact and construction products from the first year." not only that, This will also provide opportunities for Hitachi construction machinery's mining business. The goal of "carbon neutralization" urgently needs to change its investment policy to achieve zero emission. "Hitachi construction machinery's mining dump has a good trading record in Central Asia and Africa. Next, it will expand the South American market together with abb."
At the same time, John Deere has great expectations for the future development of his excavator products. John Deere will invest heavily in the excavator product lineup, including adjusting and integrating advanced technologies consistent with intelligent construction solutions.
"The intelligent strategy is based on John Deere's manufacturing advantages and core values, and aims to create greater value for customers through leading technology."
"John Deere will fully control the whole process of excavator from design to manufacturing and service. We will be able to use the R & D technology of the whole enterprise to put some advanced functions into excavator products, so as to strengthen the whole product portfolio," said a spokesman. John stone, head of John Deere's construction and forestry department, also mentioned: "when we open the new chapter of John Deere's independently developed excavator, we are still committed to supporting customers today and tomorrow." "Looking ahead, John Deere will carry forward the tradition of quality and productivity, accelerate the research and development of industry-leading technologies and products, meet the needs of more intelligent, safer and more sustainable construction machinery products, and help customers shape tomorrow's world together," he added.
