Hitachi Construction Machinery

Global

Explanatory Meeting for First Quarter Ended June 30, 2011 Outline of Answers to Main Questions

Q: What is the forecast of the global demand for hydraulic excavators for fiscal 2011?

A: Although the demand in China is dropping because of monetary tightening and other reasons, the demand for hydraulic excavators is growing world wide because of rising demand in emerging countries and recovery in demand in the US and other developed countries. Our forecast is, at this point in time, that the demand will increase 7% compared with the demand of last year, to reach 245,000 units. Also demand in the mining sector is growing favorably.

Q: The forecast for business results for the second quarter has been revised. What is the reason for this revision?

A: We now expect that the actual demand for hydraulic excavators worldwide will be less than stated in our previous forecast that was announced on May 26 because of the drop in the demand in China due to monetary tightening and other reasons, although the demand is growing elsewhere, including North America, Japan, and some other countries in Asia. Under these circumstances, we expect that aggregated net sales for the second quarter will be lower than previously forecast. However, operating income, ordinary income and net income will exceed the figures previously forecast because of favorable results in parts and services business sectors, whose profitability is high, and because of progress in cutting costs.

Q: Please comment on the forecast of business results for the entire fiscal year.

A: Although there are negative trends such as the decreasing demand in China and the continued strengthening of the yen, we are striving to achieve the forecast of business results for the entire fiscal year. We will do this by various means including selling the machines that were originally planned to be sold in China in countries where sales are favorable, improving sales prices, and cutting the costs of materials and expenses.

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