Japanese equipment manufacturers Hitachi Construction Machinery, Komatsu and Kubota experienced mixed performances in North America over the prior reporting period as most markets slowed despite continued strong infrastructure investment.
Hitachi Construction Machinery’s North American net revenue landed at 146.6 billion yen ($953.5 million) for the first half of its fiscal 2024, which ended Sept. 30, down 5.2% year over year, according to the company’s Oct. 25 earnings release. Total business in the Americas landed at $1.1 billion, down 1.8% YoY.
Despite the relative strength in the Americas market, current stagnation means demand conditions remain unlikely to improve, Masafumi Senzaki, president and chief operating officer, said during Hitachi’s Oct. 25 earnings call.
“While our business in the Americas, particularly in North America, was affected by the stagnation of the general construction machinery market and the impact of dealers reducing their inventories, we were able to maintain the same level of revenue as the previous year,” he said. “With regard to the outlook for the current fiscal year, due to the stagnation in investment appetite, it is difficult to predict a recovery in demand in North America within the current fiscal year.”
As a result, Hitachi lowered its forecast, despite optimism around market share growth, Senzaki said.
“In the North American market, we are steadily increasing our retail market share even in this demand environment,” he said. “We expect our own business to grow even on a local currency basis, and the initiatives we have been taking since we started developing our own business are steadily starting to bear fruit.”
Komatsu North American sales rise 9% YoY
Komatsu’s North American construction, mining and utility segment grew to $1.5 billion in the third quarter, up 9% YoY, according to the company’s earnings presentation for the six months ended Sept. 30, released Oct. 29.
Similar to Hitachi, infrastructure demand in North America played a large role in the company’s performance, Kiyoshi Hishinuma, general manager for the business coordination department of Komatsu, said during the company’s Oct. 29 earnings call.
“Demand for rental and energy decreased, but demand for infrastructure remained steady,” he said. “In the United States, due to saturated vehicles in the rental market, the decline in demand for rental has become prominent, but we’ll monitor the impact of interest rate cut, which started in September. on demand going forward.”
With a second interest rate cut by the Federal Reserve on Nov. 7, Komatsu’s retail finance could continue to grow as net sales for retail finance for the first six months totaled $402.1 million, up 7.2% YoY. For the first six months of the company’s fiscal year 2024, retail finance originations were $3.7 billion, up 18.3% YoY and retail finance managed assets totaled $9.3 billion, up 7.4% YoY.
Kubota North American sales rise 5% YoY
Kubota’s current finance receivables for the first nine months of 2024 came in at $3.8 billion, an increase of 2.6% YoY, according to the company’s Nov. 8 earnings report. Meanwhile financing costs for the nine months came in at $16.1 million, an increase of 7.8% YoY, and finance income jumped 39.5% YoY to $121.1 million, according to the Nov. 8 earnings report.
Much like its fellow Japanese OEMs, Kubota experienced steady demand related to infrastructure, but other equipment categories saw a slowdown, the company said in its Nov. 8 earnings release.
“In North America, although the sales of CE increased with steady demand for infrastructure development by the government, the company struggled with tractor business due to stagnation in the residential market and crop prices decline,” according to the release.
Kubota North American sales revenue landed at $6.4 billion, up 4.5% YoY, according to the release.
Editor’s note: All amounts have been converted to U.S. dollars.
