Hitachi Construction Machinery

Global

Hitachi Construction Machinery to Pursue Independent Strategy in Europe

30 Mar, 2001

Tokyo, Japan-March 30, 2001—– Hitachi Construction Machinery Co., Ltd. ( “Hitachi” ) today announced that it would terminate a joint venture relationship with Fiat in connection with Fiat Hitachi Excavators, S.p.A. ( “FHE” ), a manufacturing and sales company based in Europe. After the termination, Hitachi will pursue an independent strategy in Europe, Africa and the Middle East.

Hitachi and CNH Global, N.V. ( “CNH” ), the construction machinery/agricultural equipment arm of the Fiat Group, have agreed that they would terminate the joint venture relationship when Hitachi sells all of its interest in FHE to CNH in June 2002. The termination of this relationship makes it possible for Hitachi to enter the Europe, Africa and Middle East markets on its own in January 2003, and to develop independent operations in manufacturing, sales and service.

Immediately upon the termination of the joint venture relationship, Hitachi will commence a formation of its own sales network in Europe, centered around Hitachi Construction Machinery (Europe), B.V. ( “HCME” ), the manufacturing and sales arm for Hitachi there, so as to be ready for market entry by January 2003. With respect to manufacturing, Hitachi will marshal the resources of Hitachi Construction Machinery group companies to meet the needs. Hitachi plans to pursue full-line policy by adding wheel loaders, backhoe loaders, skid steer loaders, rigid dumps and articulated dumps to its crawler excavators, wheeled excavators, mini-shovels, cranes and aerial platforms, for offering to its dealers.

FHE was established in 1986 as a joint venture between Hitachi and Fiat-Allis, which was the construction machinery arm of the Fiat Group at that time and later became CNH after a merger with the agricultural equipment arm. FHE conducted the business of the manufacturing and sales of excavators in Torino, Italy. In 1994, it merged into itself the business that produced wheel loaders and bulldozers to become an integrated construction machinery maker. In recent years, however, the joint venture parties came to recognize that Fiat’s globalization strategy of its construction machinery business, resulting in the merger of that business with Case Corporation in November 1999 to become CNH, conflicted with Hitachi’s full-line policy. This recognition has led to the agreement to terminate the joint venture relationship. For FHE’s smooth transition from Hitachi technology to new technology, FHE will continue to manufacture some of the current models up until the end of 2003.

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