Hitachi Construction Machinery (Europe) NV (HCME) is well placed to benefit from European construction and quarrying equipment market buoyancy, according to Takaharu Ikeda.
The Amsterdam-headquartered European subsidiary of Japanese off-highway machinery giant Hitachi Construction Machinery has risen to the multi-faceted challenges associated with continent-wide trading during a pandemic, increasing its unit assembly efficiency, adding to its already comprehensive dealership network, and reinforcing its replacement parts supply chain, all while continuing to see strong demand for its premium Zaxis-7 EU-Stage V emissions-compliant range of wheeled loaders and crawlers and wheeled excavators.
Ikeda, who this month marks one year as HCME president and management board chairman, says improving “communication and transparency” within Hitachi Construction Machinery (Europe) (HCME) and with Japanese parent company, Hitachi Construction Machinery (HCM), has also played a big role in HCME’s readiness to cater for heightened European machinery demand.
“European construction equipment market demand rose 35% in the 2021-2022 financial year [1 April 2021 to 31 March 2022]. The market is at a very high level, but we still hope for a slight rise on 2021-2022 in the 2022-2023 financial year. European national governments are ploughing in huge financial stimulus into the economy to help countries recover from the pandemic, creating huge new infrastructure demand for not just this year but up to five years from now. Construction and quarrying machines will be needed to deliver road and railway construction and repair projects and to build new housing.”
HCME will be looking to make the most of a buoyant European construction and quarrying equipment market to grow its market share. Average company figures for the 2018-2020 period show a 12.1%, 7.2%, and 4.2% share of sales within the six-tonne-and-over crawler excavator, six-tonne-and-over wheeled excavator, and mid-size wheeled loader (80HP and over) categories, respectively.
Recently launched Hitachi Zaxis-7 models include the quarrying application-suited 24-tonne ZW310-7 wheeled loader, offering powerful performance, low total cost of ownership and exceptional efficiency. High productivity levels are assured thanks to fast cycle times, a high breakout force and loading capacity, and improved acceleration on inclines via sensors installed on several machine components. New Zaxis-7 crawler excavators include the large ZX890LCR-7, which is already proving its worth on quarry sites across Europe, including Breedon’s Cloud Hill and Dowlow limestone quarries in Derbyshire, central England, where two are being used to load rigid and articulated dump trucks.
“When I arrived at HCME, I wanted to expand our parts and servicing and rental businesses,” explains Ikeda. “Both of those businesses can give our customers a lifetime relationship with us, lower their machine lifecycle costs and give us sustainability in what can be a fluctuating market.
“Europe is a very advanced market with its off-highway machine emissions regulations and embrace of machine ICT [information communication technology] solutions. I want HCME to be seen in the European market as the Number One reliable and high-quality equipment solutions supplier.”
Expanding on how HCME has adapted to COVID-19-linked disruption to its supply chain over the past two years, Ikeda says: “We have had severe supply chain and material availability constraints and when I took up my current positions, I wanted to solve that issue as soon as possible. We now have better and more frequent digital and face-to-face communication within HCME and with [HCM] Japan, better sales forecasting, better tracking of the supply chain, and better sharing of information.
“The European market is booming, and I’ve asked [HCM] Japan to create more production capacity to meet European customer orders. While some key structural Hitachi machine parts must be sourced from Japan or China, others can be sourced elsewhere. Last year we started double or multi-sourcing of some parts from European-based suppliers. This is likely to increase cost, but it means we can avoid some supply chain disruption in the long term.”
Generating €40bn a year in revenues, the European construction and quarrying equipment market is highly competitive, with a wide range of different original equipment manufacturers’ (OEMs) wheeled loaders and crawler excavators found on highly varied quarry sites across the continent. So how does Ikeda see HCME’s Zaxis-7 range standing out from its peers? “The quality, durability and performance of our machines and the strength of our dealer network are key advantages, as are the machine servicing capabilities and genuine replacement parts supply our dealers can offer.”
Ikeda believes HCM’s ConSite ICT solution, which closely monitors your machines’ operational status and alarms by sending monthly operating reports and notifying emergency alarms ensuring you have optimally operating machines that meet your needs, is another key feature of HCME’s customer offer. The Consite Pocket smartphone app gives customers and dealers fingertip access to machine condition monitoring data. ConSite OIL is the service for monitoring your HCM machines’ oil condition, and ConSite Shot is an app allowing daily inspections and acceptance and delivery inspections of HCM rental machines to be easily done on a smartphone. Finally, 2021-introduced ConSite Air software allows equipment owners and dealers to remotely carry out software updates to their Hitachi machines.
“ConSite is the number one system of its kind in the world. It allows our customers and us to monitor Hitachi machine fleets 24/7. We are making progress month by month with how we use and enhance the system.”
Ikeda says that while a range of battery-powered, quarrying-suited wheeled loaders and crawler excavators is a long-term goal for HCM and HCME, their current focus is on smaller hybrid power machines for construction industry customers. “We sell the ZE85 8.5-tonne battery-powered crawler excavator throughout Europe, which is manufactured by KTEG, a subsidiary of our German dealer. Its purchase cost is high as it costs a lot to manufacture, so sales are still small. We are trying to find ways to reduce its purchase cost.
“Hitachi Construction Machinery is also carrying out research into hydrogen engines. And our hybrid and battery-powered machines also represent our contribution to reducing the carbon footprint of our wheeled loaders and crawler excavators.”
HCME reorganised its production capabilities in 2021, focusing more on machine assembly with factory options and discontinued machining and welding to improve production efficiency.
One of its two former Oosterhout plants in the Netherlands produced about 4,000 mini hydraulic excavators, the other assembled mid-sized excavators. Now, orders for the European market are shipped from HCM facilities, including the Shiga plant in western Japan. While HCM wheeled loaders are shipped directly to European customers via their dealers, imported crawler and wheeled excavators for mainland Europe customers are customised at HCME’s state-of-the-art facility in Amsterdam and then distributed to clients. Crawler and wheeled loaders are mostly shipped directly from Japan to the UK for UK customers. The model specification is less complicated, and Hitachi Construction Machinery (UK) has its own high-quality fabrication and assembly facility.
An economics graduate from Keio University in Tokyo, Ikeda’s impressive career with HCM spans nearly 40 years, including extensive experience in Asia and North America, the latter including two years working with John Deere as part of its joint venture with HCM, before taking on his current HCME leadership roles. I’m curious about what attracted him to a career in the global construction and quarrying machinery industry.
“While I was studying, I was thinking of a different career, then a senior student involved with Hitachi Construction Machinery invited me to the company. I liked that it was such a big global company doing big business. After graduating in 1982, I started [at HCM] in sales and administration, then worked in promotion and planning. I then joined the company’s rental and used equipment business before moving on to systems development. I worked in Japan for ten years and was also managing director of Hitachi China’s Shanghai operation. Having a lot of experience across different major markets gave me a clear idea of what I wanted to do when I came to Europe to take up my current roles.”
Commenting on how the European construction and quarrying equipment markets differ from other big regional markets, Ikeda adds: “The European market is huge. I did not appreciate how big it was when working in Asia and North America. The emissions compliance level and mandatory ICT requirements in Europe are the highest globally.
“I would say that the Asian and US supply chains are better than Europe’s. Their logistics capability is much faster. In the US, for example, you can get any replacement part within 24 hours, sometimes even within 12 hours. This is possible as it is a single huge country. Europe is a united nations of different countries, cultures and languages.”
Summing up his management approach at HCME and within the wider HCM business, Ikeda says: “I enjoy all aspects of the business, including discussing with our engineers what kind of issues they have, the machine development processes required, and exactly what kind of machines our customers need. This helps me understand what our business’s sales and machine servicing areas must do. We need to have a very close relationship with our customers and listen to their future needs. Combining management, sales, machine servicing, machine design, and manufacturing is mandatory and crucial for us to develop.”
