Announcement of Establishment of a Joint Venture Finance Company for Construction Machinery in North America
November 21, 2022
Expanding the North America finance business system as the first round of collaboration following our capital alliance
On November 11th 2022, the three companies ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Keita Ishii, President and COO; hereinafter “ITOCHU”), Tokyo Century Corporation (headquartered in Chiyoda-ku, Tokyo; Koichi Baba, President and CEO; hereinafter “Tokyo Century”), and Hitachi Construction Machinery Co., Ltd. (headquartered in Taito-ku, Tokyo; Kotaro Hirano, President and Executive Officer; hereinafter “Hitachi Construction Machinery”) announced today that the three companies agreed to establish, via the U.S. corporation of each company, the joint venture finance company ZAXIS Financial Services Americas, LLC (hereinafter “ZAXIS Finance”) for financing sales of construction machinery sold by the Hitachi Construction Machinery Group in North America.
In North America, ITOCHU has already been engaged in Multiquip Inc., which operates a business manufacturing and selling small-size construction machinery and generators, and in a business for next-generation online rentals of construction equipment. On August 23, 2022, it invested in Hitachi Construction Machinery, aiming to create synergy from mutual use of the ITOCHU Group’s land and sea logistics networks in Japan and the United States and the customer networks of both groups.
Tokyo Century provides a wide range of financial services in the United States, which is positioned as a key area for its International Business segment, ranging from leasing of IT equipment to auto financing of trucks and other vehicles. As the size of its business in the United States has grown dramatically in recent years, the company is aiming to further expand its business in the United States by making full use of the financing expertise that it has developed through past joint ventures with Hitachi Construction Machinery and ITOCHU in Asia, as well as its extensive network of business bases and other advantages.
The North America construction machinery market is the largest in the world*1, and stable demand is expected to continue in fields such as home construction and infrastructure. Customers which purchase construction machinery in many cases pay the price of the machinery in installments over an extended period, and in North America in particular, construction machinery manufacturers must provide dealers and customers with rapid financing investigations and a competitive financing menu which meets customer needs.
*1: As estimated by Hitachi Construction Machinery.
Beginning from March 2022, Hitachi Construction Machinery began independently operating a business ranging from new machinery sales to a value chain business*2 using its own network throughout the Americas. Ever since this beginning, these three companies have been conducting studies for business partnerships and strengthening their systems in the finance area. The same three companies have already established and are operating joint finance companies in Thailand and Indonesia, and based on this experience they agreed to establish a joint finance company in North America as the first round of collaboration following the capital alliance between ITOCHU and Hitachi Construction Machinery.
*2: Hitachi Construction Machinery business other than new machinery sales, including parts and service, solutions business, and rentals and used equipment.
In the operation of this joint venture company, the ITOCHU Group will be responsible for business operations including North America financial services, while the Tokyo Century Group will be responsible for providing financing products and establishing of a financing investigation and credit system. The Hitachi Construction Machinery Group will cooperate through the provision of marketing information and resale of construction machinery. As stable demand is expected in North America, through ZAXIS Finance we will be providing high-quality financial services and working to expand sales of Hitachi Construction Machinery Group products and services.
Outline of joint venture company
|Company Name||ZAXIS Financial Services Americas, LLC|
|Location of headquarters||Atlanta, Georgia, USA|
|Business activities||Captive finance business for construction machinery sold by the Hitachi Construction Machinery Group|
|Capital||50 million USD (approximately 7.4 billion JPY)*3|
|Planned start of operations||2023*4|
|ITOCHU International Inc. (35％)
Tokyo Century (USA) Inc. (35％)
Hitachi Construction Machinery Americas Inc. (30％)
*3: Calculated using the exchange rate of 1 USD = 148.25 JPY, current as of November 1, 2022.
*4: The establishment of ZAXIS Finance is subject to the condition that the necessary licenses and other permits can be obtained from the relevant authorities.
Information contained in this news release is current as of the date of the press announcement, but may be subject to change without prior notice.