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In order to oversee and advance its global strategies, Hitachi has created global roles and, on 1 April 2014, Alistair Dormer, executive chairman and chief executive officer of Hitachi Rail Europe, was appointed as the new global CEO of the rail systems business.
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To find out more about Hitachi Rail’s global strategy, and the company’s plans for the UK, European and international market, Frances Marcellin spoke to Alistair Dormer.
Frances Marcellin: What are the reasons behind the decision to move Hitachi’s headquarters across to Europe – and does Hitachi Rail intend to make Europe its biggest market?
Alistair Dormer: Japan has traditionally been Hitachi Rail’s biggest single market, however we are active in many countries across the world. Our international business will shortly become bigger than our domestic Japanese business and, to reflect this, moving the decision-making capability away from Japan is a significant sign of the impending growth. Europe is the biggest rail market in the world and the decision to have the Global CEO based here is a move to facilitate more local leadership and growth in international markets including Europe.
FM: Hitachi has created new "global" roles to develop and advance the company’s global strategies. What does this new structure hope to achieve for Hitachi’s business?
Hitachi’s rolling stock deal for the UK’s Intercity Express Programme could boost revenue by £3.3bn.
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AD: Hitachi has been in business for over 100 years, with our company firmly rooted in engineering. Turbines for energy production were among the first products made by Hitachi, and trains followed soon after. Fifty years ago, we started building the Shinkansen bullet trains and have continuously been involved in building them. Today, Hitachi is focusing more than ever on Social Innovation Business, which combines our IT technology with infrastructure technology, and transport is very prominent in this area. With the creation of new global roles, Hitachi’s top management is strengthening the rail business, ensuring that we can react to our customers faster and more flexibly.
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By GlobalDataFM: The IEP (Intercity Express Programme) contract, worth £5.8bn over 27.5 years, has led to the construction of two new maintenance depots and new design facilities. Will this move bring even more?
AD: The recent announcement that Agility Trains, of which Hitachi is the main shareholder, has successfully financed the IEP was great news for us. The IEP contract has given us enough critical mass to make the decision to build a train manufacturing plant in the UK and construction of the plant has already started on our site in Newton Aycliffe. Our plan is to win more contracts, both in the UK and in Europe, to keep the order books for our factory full. We have an option on a neighbouring plot of land in Newton Aycliffe, should we need to expand further in the future.
FM: Can you offer some details regarding some of the plans Hitachi has to grow and expand its global business development in the rail systems business?
AD: In the UK, Hitachi Rail is currently best known for manufacturing and maintaining the Class 395 Javelin™ trains and, of course, the Intercity Express Programme, but our product portfolio is much wider. We have gained certification in ETCS and have provided a prototype Traffic Management System (TMS) for Network Rail. We are working hard to supply the full range of our products to our current and future customers.
FM: What aspects of Hitachi’s advanced rail systems technology will play a role in Hitachi’s plans for growth?
AD: All of the above – rolling stock manufacture, maintenance, signalling technology and TMS, among others.
FM: New business development and market expansion is part of Hitachi’s plans for growth, can you share some details on this particular aspect of the company’s goals?
AD: For our long-term strategy, it is particularly important that we localise to offer our current and future customers the best solutions. Localisation is very important, as local teams can best interact with local customers. We have already established teams in Germany, India, Vietnam, Australia, in addition to our major centres in Japan, China and the UK. We will be looking at further international expansion over the coming years.
FM: Hitachi Rail has qualified recently for bids in Germany and Sweden. Can you give some details about these bids and any other European bids that Hitachi currently has in play?
AD: Hitachi Rail is currently speaking to all major operators in Europe and I believe that we have a good product offering for them. We cannot discuss individual bids at this point. It is a big challenge to break into the market and we don’t underestimate this.
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