HCM’s Hard-Rock Mining and Independent Expansion Should Drive Long-Term Margin Growth
As a construction and mining machinery manufacturer, Hitachi Construction Machinery’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 the supply and maintenance of spare parts. 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 in its ConSite system, which allows the monitoring of the equipment’s operational status, and if issues are detected, HCM can provide preventive or corrective measures. These services provide significant value to end users and are highly profitable.
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