Hitachi Construction Machinery Co., Ltd.

Business Details

Provides a total lifecycle related to construction machinery through the manufacture and sale of hydraulic excavators, ultra-large hydraulic excavators, wheel loaders, and related parts and service sales. Targeting both construction and mining markets, the segment expands its Value Chain Business (parts and service) in addition to new machine sales. It promotes global expansion centered on directly operated businesses in Europe and the Americas, and is the flagship segment accounting for approximately 90% of consolidated revenue.

Recent Overview

Directly operated businesses in Europe and the Americas remained solid, but adjusted operating profit fell 6.4% year on year due to U.S. tariffs and worsening regional/product mix

In FY2026 (ending March 2026), the Construction Machinery Business Segment achieved revenue growth to ¥1,268,594 million (up 2.0% year on year). Sales through directly operated businesses in Europe and the Americas remained solid, and price increases supported revenue and adjusted operating profit. On the other hand, increased costs including U.S. tariffs and a deterioration in regional/product mix (declining sales in the Americas OEM business and Oceania) weighed on profit, resulting in adjusted operating profit of ¥121,481 million (down 6.4% year on year). In addition, business structural reform-related expenses of ¥4,970 million and losses on business restructuring, etc. of ¥7,254 million (loss associated with the resolution to sell ECCO Equipment Company, LLC) were recorded, resulting in operating profit of ¥119,286 million (down 15.2% year on year).

Key Products

Growth Drivers

• Solid sales through directly operated businesses in Europe and the Americas (earnings supported by global price increases)
• Resilient demand in the Value Chain Business (parts and service) for construction and mining applications
• Expansion of the Americas directly operated business (increased retail sales share in the North American market)
• Under the new medium-term management plan 'LANDCROS 2028,' promotion of North America, Latin America, mining, and parts service as four priority businesses
• Strengthening of the Latin America business foundation (establishment of a Chile holding company and a Brazil joint venture)
• Expansion of digital solutions business including LANDCROS
• Brand renewal and business restructuring associated with the April 2027 corporate name change (to Landcros Corporation)

Risks

• Increased costs from U.S. tariff policy (expected to be partially absorbed through price increases, though uncertainty remains)
• Deterioration in regional/product mix (declining sales in the Americas OEM business and Oceania)
• Decreased demand for new hydraulic excavators due to persistently high interest rates in North America and Europe
• Downward pressure on revenue and profit from yen appreciation
• Increased growth investment costs such as R&D expenses, personnel costs, and sales promotion expenses
• Costs associated with brand transition (LANDCROS)
• Risk of recovery of trade receivables and inventories at the Russian subsidiary due to the Russia-Ukraine situation
• Decreased demand for new machines due to low levels of resource prices such as coal and iron ore for mining
• Impact of escalating tensions in the Middle East (not yet incorporated into current earnings forecasts)