One of the major changes in our group is the start of full-scale independent expansion into the North, Central, and South American markets in fiscal 2021. As is well known, the North, Central, and South America market is the world’s largest for construction machinery, accounting for about 40% of global demand. This market is also the world’s largest for mining machinery in operation. For example, the European market is dominated by construction and small construction machinery used in public works projects, as well as in the construction of buildings, homes and other structures. The region only has a limited number of mining machines in operation. Australia, on the contrary, is a market for large mining machines used in resource mining and other applications. In comparison, North, Central, and South America rep-resents a large-scale market active for all types of construction and mining machinery.
However, we have not performed well in North, Central, and South America historically. Under our business alliance with major U.S. agricultural machinery manufacturer Deere & Company (Deere) in 1988, we were responsible for roduct development and production. Deere was responsible for sales and service, which prevented us from providing our own sales and service operations. In the beginning, customers were satisfied as long as their equipment performed well and was of good quality. But as customer needs shifted dramatically from products to services, we were faced with the increasing requirement to identify customer needs on our own, providing products, technologies and services directly and in a timely manner using machine operating information. After repeated discussions with Deere, we decided to dissolve the joint venture agreement.
We began the full-scale expansion of our own business into North and South America in March 2022. This independent expansion has been a long-held dream of ours. We opened a new door, but now the real work begins. It will be important for us to listen to customer issues and work as a team to find solutions. But I believe that Hitachi Construction Machinery employees can meet this task.