HITACHI CONSTRUCTION MACHINERY

Mitsuhiro Tabei is the President and Managing Director of Hitachi Construction Machinery (Europe) NV (HCME). He is perfectly suited to his role, with broad Hitachi Construction Machinery (HCM) experience and secondments in overseas markets. He has travelled extensively, speaks Italian and English, and brings a fresh approach to the company. In an exclusive interview, Mr Tabei reveals his early impressions of HCME and the challenges which lie ahead.

Mr Tabei and his wife arrived in Amsterdam in April 2007 and now feel happy in their city centre home. The use of a car is an added bonus for them, as this ‘freedom’ is almost impossible in Tokyo due to traffic congestion. However, they have also ‘imported’ their own bicycles to participate in that well-known Dutch pastime and popular mode of transport.

Mr and Mrs Tabei have already lived in Europe and took the opportunity to visit many interesting places. They have a strong interest in history and art, and so found their previous base in Italy to be particularly enjoyable.
However, they want to stay closer to their adopted home on this occasion. “We have already found some beautiful places to visit in The Netherlands,” Mr Tabei explains. “I also encourage my Japanese colleagues to do likewise, as touring the country is a great way to learn about Dutch history and culture.

“HCM has a corporate ‘bible’ which advises that we should be diplomatic when working overseas. Our aim is to be good foreign visitors.”

Mr Tabei has gathered a vast knowledge of the construction industry since joining HCM in 1975. He was immediately assigned to the International Sales Department in Tokyo, where he became part of an expanding sector.

“At that time, less than ten per cent of HCM’s turnover was contributed by international sales,” he reflects. “Then, it was decided to increase overseas sales as a matter of priority. So, I was lucky, because it was a good time for me to join this department.”

The first three years of his career were focussed on HCM’s parts business. This was a useful induction period and he quickly became aware of the importance of parts to the overall business.

By 1982, Mr Tabei had gained enough experience for his first placement abroad in South Africa. “These were difficult times because of Apartheid,” he recalls. “I was stationed there to support the independent Hitachi dealer. This was another significant step forward in my career.”

He returned to Japan two years later and was given responsibility for the European market. This coincided with the anti-dumping duty imposed by the EC on Japanese exports to Europe.

“It was necessary for Hitachi to find a suitable ‘insider’ and localise its European operations,” adds Mr Tabei. “Hitachi shook hands with Fiat in 1984 and I was assigned to Italy in 1992. I spent five years there as an advisor on the Fiat-Hitachi collaboration.

“I actually returned to Japan at the worst possible time with the collapse of the domestic economy and recession of 1997-98. The situation was completely different to the one I had left before my departure. The market almost disintegrated and HCM went through some very hard times.”

There was a major restructure at HCM in 2002 following the economic depression. Mr Tabei was appointed as the Managing Director of HCM’s subsidiary in Malaysia. As the economy began to recover, the fortunes of the company returned.

After three years, Mr Tabei went back to Tokyo and he was then offered his current position at HCME. In total, Mr Tabei has visited more than 70 countries – the most recent was Luxembourg – so he wasn’t at all phased by a return to Europe.

“There is no doubt that the time spent in South Africa and Italy has been an important factor with regard to my appointment to HCME,” Mr Tabei admits. “Learning the respective languages has been the most important aspect of this experience. These skills have given me the confidence to progress.”

Coincidentally, Mr Tabei has always worked with and reported to his predecessors at HCME, Mr Nakaura and Mr Mori (who have both returned to HCM’s head office). In fact, he reported into Mr Mori’s Singapore office while in Malaysia.

He also shares Mr Mori’s passion for golf and – like his colleague – achieved a hole-in-one shortly after his arrival in Europe. Further sporting success followed for Mr Tabei when he managed to win the Japanese Chamber of Commerce’s golf tournament in The Netherlands.

One of the biggest challenges facing the HCME President is that his previous senior management position in Malaysia didn’t include the responsibility of a manufacturing plant. This situation is obviously very different in Europe with the rapidly expanding factory in Amsterdam.

“Mr Nakaura advised me to assess the current situation with the factory and then prioritise the tasks required to solve any potential problems,” he explains. “After only a few months in office, I am still establishing the critical issues.”

The number one concern for Mr Tabei and his management team is factory output. The European market is still booming and Hitachi dealers are keen to receive more machines than ever before to satisfy this demand.

“There are many reasons for the delay in delivering new machines to the market,” Mr Tabei continues. “Most importantly, factory output is not increasing at the same rate as market demand.

“With this urgency, we must also keep a close eye on quality. It’s always the same game of quality versus quantity! Training is also a big issue, because there is a relatively big staff turnover in our industry – younger people seem to prefer ‘cleaner’ office jobs.

“Finally, the supply chain is expanding with imported components arriving from Indonesia, China, Poland, the Czech Republic and so on – as well as Japan of course. These components are big and heavy, which means that the logistical process takes time and requires a huge investment. And of course production capacity doesn’t always follow suit…

“This is a headache and every night I find myself pondering all of these issues.”

Externally, his early impressions of the construction market recognise the growing significance of Russia, the Middle East and South Africa within HCME’s territory. HCME also has a new subsidiary – the British distributor HM Plant – which presents its own challenges.

“Company legislation means that we must announce accurate results every quarter,” he highlights. “This is a challenge to ensure that everything remains under tight control and satisfies these regulations.

“However, I consider that the most important aspect of my role is to maintain and further develop dealer relations. I’m a sales-oriented person and so my primary concern is how HCME can overcome the bottleneck in the production process before looking at the whole HCME network.”

HCME is still on target to meet its market share targets for 2010: 20 per cent for mid-range and large excavators; and 15 per cent for mini-excavators and wheel loaders. This is the same target being passed on to HCME’s dealer network. Mr Tabei also has to bring the HCME organisation into line with HCM’s SOH mid-term management plan which was launched in April 2007.

Fortunately, he already knows many of the people involved in the leading western European dealers thanks to his work with Fiat-Hitachi. However, the central and eastern European markets are still relatively new to him.
“For me, our dealers are the ‘teacher’ in each country,” he continues. “They live in the reality of the market and know how to look after their businesses. They are standing next to the customer and can act very quickly on behalf of HCME if required. They know how to survive and conduct their business in a professional manner.”

While Mr Tabei had attended Bauma in the past, 2007 was of course his first official visit as part of HCME. “This was a huge success based on the comments of our staff, dealers and customers,” he enthuses. “We had to present a consistent approach and project the growth of the company in the most visible way. That is why we had our biggest-ever stand.

“This was an opportunity for Hitachi to display its core product range to the public. We should continue to concentrate on Hitachi wheel loaders, crawler, wheeled and mini-excavators, and dump trucks, but also consider the expansion of special applications such as recycling and demolition.

“The Application Centre holds a big opportunity for HCME at the current time. There are many different types of machine in Japan and some of these can quite simply be transferred to Europe. However, this is not always the case. This aspect of the market is price sensitive and we need to address product liability issues if we are to be successful.”

The current HCME President is carrying on where Mr Mori left off – focussing on the priority of increasing production to meet the demands of the European market. He is already doing this with the dealer network and end users at the forefront of his mind.

“Everyone at HCME appreciates that our customers remain loyal to the Hitachi brand,” he summarises. “In return, we are busy with the challenge of increasing production capacity to meet their requirements in the construction and related industries.

“I would ask everyone to be patient and Hitachi will make a difference. HCM has already decided to invest in new production plants in Japan. We will continue to develop even better products while maintaining the high levels of quality and reliability which have become synonymous with Hitachi.”