Expect Hitachi Construction Machinery's Profitability to Improve From Growth of Value Chain Business

As a construction/mining machinery manufacturer, Hitachi Construction Machinery’s, or HCM’s, lifeline will be from sales of its mainstay hydraulic excavators, mining dump trucks, and wheel loaders. However, the company’s core strategy will focus on growing its “value chain” business, which includes services like spare parts supply and maintenance. As its product sales increase through both direct channels and dealers, the company can provide more aftermarket services. Further, more of HCM’s machines will be included its ConSite system, which allows the monitoring of the equipment’s operational status and if issues are detected, HCM can provide preventative/corrective measures. These services provide significant value for the end-users and are highly profitable.