Business Result for the Second Quarter ended September 30, 2017 Regional Market Environments and Projections

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1 Business Result for the Second Quarter ended September 3, 217 Regional Market Environments and Projections October 2, 217 Hitachi Construction Machinery Co., Ltd. Executive Vice President and Executive Officer Yasushi Ochiai Hitachi Construction Machinery Co., Ltd All rights reserved.

2 Global Demand Trend for Hydraulic Excavators 1 2, Excluding Chinese manufacturer (K Units) 2 Emerging Countries 217:4% (Y-o-Y Change:+2%) *Emerging Countries: China, Asia/Oceania, and others FY '9 '1 '11 '12 '13 14 '1 '16 '17 '17 Previous Present Outlook Outlook Total China Others Asia Oceania North America Western Europe Japan Total China '16 '17 Previous Outlook '17 Present Outlook +12% +7% +12% +8% +29% +39% Russia, CIS, E Europe +23% +14% +1% Africa +13% -12% -12% Middle East -4% +3% +3% Latin America -1% -2% -2% Others -18% +% +% India +44% +16% +16% Indonesia +36% +14% +29% Others +16% -% -1% Asia & Oceania N America W Europe Japan Year-on-Year Change +28% +% +% -4% +% +9% +17% -% +3% -4% +4% +13% (Distributing, copying, or forwarding prohibited)

3 <Japan> FY1/1Q FY1/1Q FY1/1Q FY1/1Q 2 3 While public investment and housing investment decreased, capital investment has recovered. Regarding demand for construction machinery from April to September 217, demand for hydraulic excavators and wheel loaders significantly increased (41% and 31% y-o-y, respectively). This was, driven by last-minute demands in anticipation of the new emissions regulations. Market Environment: Housing/Public Spending and Capex (y-o-y) 4% 2% Public spending (Public work orders) *Source: MLIT, Cabinet Office, and Construction Surety Company (K units) Demand Trend for Mini Excavators 2 1 1% 1% % % 1 % -2% -4% Capex (Orders for machinery, excluding foreign demands) New housing starts (number of houses) -% -1% -1% Demand Trend for Hydraulic Excavators (K units) (K units) 2 1% 2 1% 1 1 % Demand Trend for Wheel Loaders 1% 1% % 1 % 1 % -% -1% -% -1% -1% -1%

4 <Europe> CY12/1Q CY13/1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q FY1/1Q FY1/1Q FY1/1Q 3 4 GDP showed solid growth throughout the Euro zone. Demand for hydraulic excavators and wheel loaders remained brisk. Demand for mini excavators significantly increased (2% y-o-y), mainly in the UK and Italy. 2% 1% GDP Growth Rate in Major Countries (y-o-y) *Source: IMF, etc (K units) 2 UK 1 Germany Demand Trend for Mini Excavators 1% Others % Germany % -1% France EUR zone 1 % Italy France -% UK -1% Demand Trend for Hydraulic Excavators (K units) (K units) 2 1% 2 Others 1 % 1 Germany 1 % Italy 1 -% France UK -1% Demand Trend for Wheel Loaders 1% Others % Germany % Italy France -% UK -1%

5 Topic Viscosity Density Permittivity 4 New service "ConSite OIL" has been launched. Industry first Occurrence of error 24-7 monitoring by oil sensor Customer benefits Reduction of machine down time (improved machine availability) Reduction of life cycle cost (failures of components are mostly caused by oil) HCM Dealer Patent pending Failure prediction of engine and hydraulic components During normal operation "Direct" sensing of oil error Hydraulic oil Engine oil Equipped with oilmonitoring sensor Customer Proposal for preventive maintenance based on oil error Oil exchange Oil exchange Timing and data of oil exchange can be grasped. 1 1 hour To be launched in Europe and Australia in October 217

6 CY12/1Q CY13/1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q FY1/1Q CY12/1Q CY13 1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q FY1/1Q <North America> 6 Housing starts remained brisk, and residential construction spending continuously increased. Demand for hydraulic/mini excavators continuously increased (13% and 14% y-o-y, respectively). GDP Growth Rate, Housing Starts in US (K units) (K units) 2 1% 2 GDP (y-o-y/right axis) 1 % 1 Demand Trend for Hydraulic Excavators 1% % 1 % 1 % Housing starts (Left axis) (Seasonally adjusted) -% -% -1% -1% *Bureau of Economic Census, US Census Bureau 1% Construction Spending in US (y-o-y) Residential Non-residential State & local (K units) Demand Trend for Mini Excavators 2 1% 12% 1 % 1% 1 % -% 7% -1% *Bureau of Economic Census, US Census Bureau

7 <China> CY11/1Q CY12/1Q CY13/1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q FY1/1Q 6 7 The GDP growth rate from April to September 217 remained stable at around 6.8%. Significant increase in demand for hydraulic excavator continued (2.2 times y-o-y), mainly due to increased public investment. * 当社推定 * 当社推定 4% 3% 2% 1% % GDP and Fixed Asset Investment GDP (Right axis) (y-o-y) (6.8%) (. %) Fixed Asset Investment (y-o-y) (Left axis) *National Bureau of Statistics of China (%) Quarterly Demand for Hydraulic Excavators by Region (y-o-y) FY16 / FY17 1Q/ North West 89%/72%/1%/128% South West 82%/1%/11%/72% Total China 83%/19%/132%/12% *Foreign manufactures only North East 2%/114%/146%/13% North China 226%/237%/229%/22% East China 13%/124%/162%/99% South Middle China 64%/97%/11%/92% Demand Trend for Hydraulic Excavators Demand Composition by Class for Mini Excavators and Hydraulic Excavators 千台 ) Y-o-y comparison data is limited to foreign manufactures only Domestic Foreign 1% 1% % % -% -1% -1% 1% 8% 6% 4% 2% % FY14 FY1 FY16 FY17 1H 2H 1Q 1Q 1Q 2t over 2t and below 4t~ 3~39t 21~29t 2t 1~1t 6~1t ~6t Foreign manufactures only

8 <(Supplementary Information) China> Monthly Demand Trend for Hydraulic Excavators (K units) (Foreign Manufactures only) Apr. 4 月 May. 月 6 Jun. 月 7 Jul. 月 Aug. 8 月 Sep. 9 月 1 Oct. 月 11 Nov. 月 12 Dec. 月 Jan. 1 月 2 Feb. 月 3 Mar. 月 Apr. 4 月 May. 月 6 Jun. 月 7 Jul. 月 8 Aug. 月 9 Sep. 月 1 Oct. 月 11 Nov. 月 12 Dec. 月 1 Jan. 月 2 Feb. 月 3 Mar. 月 4 Apr. 月 May. 月 6 Jun. 月 7 月 Jul. 8 Aug. 月 9 Sep. 月 9 Chinese New Year 8 Feb 8, Jan 28, Feb 16, 218 * Actual result (From April to September) % 24% 2% 16% y-o-y 12% 8% -1% +8% +83% +19% +132% +12% 4% % -4% FY21 FY216 FY217 Demand Trend for Hydraulic Excavators (y-o-y) FY217 (Forecast) FY21 Actual FY216 Actual (Compared to the same month in the previous year) (K units) (Foreign Manufactures only) -8% 4 Apr. 月 May. 月 Jun. 6 月 Jul. 7 月 Aug. 8 月 Sep. 9 月 1 Oct. 月 11 Nov. 月 12 Dec. 月 Jan. 1 月 Feb. 2 月 Mar. 3 月

9 <Asia, Oceania, and India> FY1/1Q FY1/1Q CY12/1Q CY13/1Q CY14/1Q CY1/1Q CY16/1Q CY17/1Q 8 9 Demand for hydraulic excavator significantly increased in Indonesia, Malaysia and Australia. Despite a decrease in Thailand, demand has increased in the entire Asia Pacific region (21% y-o-y). Demand for hydraulic excavator increased in India (16% y-o-y), mainly for infrastructure investments, such as railways and roads. 1 Demand Trend for Hydraulic Excavators in Asia & Oceania (K units) % 8 % (%) GDP Growth Rate in Major Countries (y-o-y) 2 *Source: IMF, etc 1 Indonesia Thailand Malaysia India 1 - Singapore % * Calculation criteria for GDP growth rate in India was revised in CY Others -1% NZ Australia Thailand -1% Singapore Malaysia Demand Trend for Hydraulic Excavators in India (K units) % 1% % % -% Indonesia -2% 1-1% -1%

10 Topic 9 1 HCM is participating in the Japan-India Public- Private Partnership Project "Manufacturing Skill Transfer Promotion Programme." With the certification of the METI, we will promote the Japan-India Institute for Manufacturing (*JIM) initiatives to cultivate human resources capable of playing a central role in India s manufacturing sites, at educational facilities within the Dharwad Works premises owned by Tata Hitachi. Tata Hitachi Company Overview Company name: Tata Hitachi Construction Machinery Company Private Limited Revenue in India: Approximately 48.6 billion (based on FY216 HCM consolidated results) *JIM:Japan-India Institute for Manufacturing Number of employees: 2,2 (as of March 31, 217) Number of manufacturing bases: 3 <The Dharwad factory of Tata Hitachi, the planned venue for the JIM project>

11 <Russia and the Middle East> Y12/1Q Y13/1Q Y14/1Q Y1/1Q Y16/1Q Y17/1Q FY1/1Q 1 11 In Russia, demand increased, underpinned by revival of crude oil prices. In the Middle East, demand continuously decreased, mainly around the Gulf countries. Foreign Exchange Rate of the Ruble Demand Trend for Hydraulic Excavators in Russia Against US$ Against EUR (K units) 4 3 *Ex-Works base *Incl. Local manufacturing 2% 1% FY12 FY13 FY14 FY1 FY16 FY17 *According to HCM s research 2 1 % -1% (US$) Price Trend of Crude Oil and Natural Gas Crude Oil (Left axis) <IMF forecast as of July> Natural Gas (Right axis) 3 FY12 FY13 FY14 FY1 FY16 FY17 (US$) (K units) Demand Trend for Hydraulic Excavators in the Middle East *Ex-Works base (Turkey: retail-prices base) 1% % Others UAE % Saudi Arabia -% -1% Turkey *Created by HCM, the source from IMF HP

12 <Mining Machinery> After four consecutive years of demand decrease (y-o-y), demand finally turned upward, and we expect an increase of around 4% y-o-y. Demand by product has increased as follows (y-o-y basis): 1t excavators by %, over 2t excavators by 2% and, trucks by 4%. Regarding demand by region, demand in Russia, Asia, and North and Central America has been brisk Ultra-large Excavator (over 1t), Truck (over 1t) (Units) 3, Demand by product 1% (Units) 3, Demand by region 2, 2, DT(over 1t)(Left axis) SH(over 1t)(Left axis) y-o-y (Right axis) % 2, 2, Central and South America North America Europe Russia CIS Oceania Asia Africa and Middle East 1, % 1, 1, 1, -% - -1% FY12 FY13 FY14 FY1 FY16 FY17 *According to HCM s research estimate FY12 FY13 FY14 FY1 FY16 FY17 estimate

13 <(Supplementary Information) BB Ratio> % % 4% 3% 2% 1% % BB Ratio (Ultra-large Hydraulic Excavator, over 1t) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY11 FY12 FY13 FY14 FY1 FY16 FY17 6% % 4% 3% 2% 1% % BB Ratio (Dump Truck, over 1t) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 FY11 FY12 FY13 FY14 FY1 FY16 FY17 * Book-to-Bill(BB)Ratio = Bookings (Orders received)/billings (Value of shipment) Non-consolidated basis (average of 6 months)

14 14 [Cautionary Statement] This material contains forward-looking statements that reflect management s views and assumptions in the light of information currently available with respect to certain future events, including expected financial position, operating results, and business strategies. Actual results may differ materially from those projected, and the events and results of such forward-looking assumptions cannot be assured. Factors that may cause actual results to differ materially from those predicted by such forward-looking statements include, but are not limited to, changes in the economic conditions in the Company s principal markets; changes in demand for the Company s products, changes in exchange rates, and the impact of regulatory changes and accounting principles and practices. END For further inquiries: Hitachi Construction Machinery Co., Ltd Public Relations Strategy office TEL : FAX : Hitachi Construction Machinery Co., Ltd All rights reserved.