Presentation of Strategies for Railway Systems Business

St t i ffor R
Strategies
RailwayilS
Systemst
B i
Business-- Accelerate Globalizatio
on with Technologies Developed in Japan --Gaku Suzuki
President & CEOO,
Industrial & Soccial Infrastructure Systems Company
Vice President anda Executive Officer, Hitachi, Ltd.
March 29, 20100

© Hitachi, Ltd. 2010. All rights reserved.

Strategies for Railway Systems BussinessAccelerate Globalization with Technologies Developed in Japan

1 Overview
1.
O
i
.

2. Strategies
3 Domestic Business3.
4. Overseas Business5 Conclusion
5.
© Hitachi, Ltd. 2010. All rights reserved.

1. Overview

Railway Systems BusinessB
in Hitachi
SEGMENT IN
NFORMATION

Financial Service
Revenues
Operating Income(millions of yen)

¥412,040¥10,210

Logistics, Services & Others
Revenues¥1 089 971¥1,089,971
Operating Income¥23,063High Functional Materials& Components
Revenues¥1,556,886
Operating Income¥27 777¥27,777

Information &Telecommunication Systems
Year endedeMarch 31, 2009
Consolidated Revenues¥10,000..3 billion

Revenues¥2,594,450
Operating Income ¥176,629
Electronic Devices
Revenues¥1,151,066
Operating Income ¥27,322
Power & Industrial Systems
Revenues¥3,310,544
Operating Income ¥24,245

Digital Media & Consumer Products
Revenues¥1,261,501
Operating Loss¥（105,563）

Industrial & Social Infrastructure Systems Company(Transportation Systems Div.)

Information & Control Systems Company(Transportation Information Systems Div.)

Rolling Stock Systems: rolling stock, electrical component,
overseas rolling stock maintenance services
Transport Management & Control Systems:
Si
Signaling/Trainli /T i controlt l system,tttraffic/power
ffi /managementt systemtpower supply system
Railway systems: ¥149.0 billion*

Transport Management & Control Systems:
Seat reservation system
Railway operation information system
IC card ticketing system
Railway systems: ¥27.7 billion

鉄道システム1,459億円＊：Unconsolidated: ¥145.9 B

Total Railway Sy
ystems Integrator
Total railway systems revenue: ¥176.7 billion (Year ended March 31, 2009)© Hitachi, Ltd. 2010. All rights reserved.

2

1. Overview

Organizzation

Industrial & Social Infrastructure Systems Company

Transportation Systems Div.
Kasado Transportation Systems Product Div.
〔Rolling Stock〕

Information & Control Systems Company

Transportation Information Systems Div.
〔Traffic/power management system,
Business support systems〕

Mito Transportation Systems Product Div.
〔 Electrical
El t i l component,tSignaling/Train control system,
Traffic management System 〕

Hitachi Works〔Main motor、IGBT
motor IGBT module〕

Kokubu Engineering & Product Div.
〔Power supply system〕

Sales Management Div.
Div
Sales & Marketing Div. 〔Domestic market〕
Global Sales & Marketing Div. 〔Overseas market〕

R&D sites■ Central Research Lab.

■ Hitachi Research Lab.

■ Mechanical Engineering
Research Lab.
■ Energy & Environmental
Systems Lab.

■ Systems Development
Lab.
■ Design Div.

Hitachi Group / Associated companies〔M j railway〔Majoril
bbusinessi
productsd〕■ Hitachi Cable, Ltd. 〔 Rolling Stocks cable 〕■ Hitachi High-Technologies Corporation〔 Track device〕■ Hitachi Kokusai Electric Inc. 〔Train system (radio/monitor)〕■ Renesas Technology Corp.
〔microprocessor for signal control〕© Hitachi, Ltd. 2010. All rights reserved.

31. Overview

Offices and Factories
Fin Japan
Hitachi Works

Kasado Transportation Systems Product Div.

Main motor

ＩＧＢＴ module

Kokubu Engineering & Product Div.

Rolling Stocks(Kudamatsu-shi, Yamaguchi-ken)

Power supply systems
Transportation Information Systems Div.

Traffic/power management
systemst(Hitachi-shi, Ibaraki-ken

Transportation Systems Div. (HQ)
Sales Management Div.

Business Support Systems

Shinagawa-ku, Tokyo)

Mito Transportation Systems Product Div.

(Chiyoda-ku, Tokyo)

Eleectrical components

Signaling/Train control systems

Traffic management
Systems(Hitacchinaka-shi, Ibaraki-ken)© Hitachi, Ltd. 2010. All rights reserved.

4

1.Overview

Overseas Subsid
diaries and Partners●Hitachi Yonge Electric Equipment (Xi’an) Co., Ltd./China●Hitachi Rail Europe Ltd. / UK
(Sales & Marketing, engineering, andmaintenance service)(Manufacture of electrical component)

Established in 2005

Established in 2003

A hf d D
Ashford
Depot●：Subsidiaries■：Partners

■●

●
●

●

■
●
●■ ●
■
●
●

●

●
●
■Network Rail Ltd
Ltd./UK/UK(Signaling/Train control systems)■Downer EＤＩ Rail Ltd./Australia(Electrical components)■●■Changchun Railway Vehicles Co., Ltd/China(Monorail)■Woojin Industrial Systemss Co., Ltd./Korea(Monorail, Electrical components)■Beijing Hollysys Co., Ltd./China(Signaling/Train control systems)■China Academy of Railway Science/China(Signaling/Train control systems)© Hitachi, Ltd. 2010. All rights reserved.

51. Overview

Products an
nd Service ①
Rolling Stocck Systems
Rolling Stocks/Overseas main
ntenance

High speed train

Limited express train

Commuter train

M
MonorailElectrical components

Overseas maintenance

Main circuit/Main motor

Air-conditioning/Air-moving system

Transport Managemen
nt & Control Systems
Signaling/Traffic Management Sy
ystemsSignaling/Train control system

Traffic management system
Power management system

Power supply system

Platform gate

Business Support Systems
Seat reservation system Railway operation
information system

IC card ticketingsystem© Hitachi, Ltd. 2010. All rights reserved.

61. Overview

Products an
nd Service ②
Efforts as total railwa
ay systems integratorHighefficiency

High-efficiency rolling stock
systemst
ffor ththe accelerationl ti n off
modal shift

Environment
friendly

Rolling stock systems to further
reduce the environmental bu
urden

High
reliability
li bili

Highly reliable transportmanagement & control systtems
supportingti safe,f stablet bl anddhigh-density transportation
HitachiRollingBombardier

AlstomAluminum trains (A-train)(A train)High-speed train
Small and lightweight inverter
Hybrid traction system
Signaling/train control system
Traffic management system
Business support system
Rolling Stock

Siemenss

SignalingA
Ansaldobreda
ld b dS dl
Stadler

CAF

A
Ansaldold STS Invensys
I

Th l
Thales

○

○

○

○

○

○

○

－

－

－

components

○

○

○

○

○

－

－

－

－

－

Transport
Signaling/
Management & Traffic
Control systems management

○

○

○

○

－

－

－

○

○

○

Rolling Stock stocks
Systems electrical© Hitachi, Ltd. 2010. All rights reserved.

7

2. Strategiees
Accelerate Globalization with Teechnologies Developed in Japan
TargetStrategies

Revenue: ¥350 billion
Overseas revenue: over 60%
Operating income: 8%¥350.0 billion
Transportt M
T
Managementt &Control Systems
Rolling Stock Systems¥176.7 billion

Over
seas

■ Focus on new Shinkansen lines■ Expand aluminum trains sales to municipal
and private railway companies■ Expand hybrid traction system business■ Expand business support systems business■ Create new businesses by collaboration withcustomers

Expand overseas businesses
Japan

FY２００８Sustainable growth in Japan

FY２０１５（Target)■ Focus on high-speed trains market■ Expand electrical components business■ ExpandEd signaling/trainili /t i controlt l systemstbbusinessi■ Expand monorail business© Hitachi, Ltd. 2010. All rights reserved.

8

3. Domestic Business(1) Rolling Stock Systtems: Delivery Record

Share of rolling stocks:23% Sha
are of electrical components :30%
* Share percentages are Hitachi estimates

C
Conventionaltil lilines
Shinkansen

Transportation Bureau of
Fukuoka Metropolitan
Government
Series 3000 train

Hokkaido Railway Co.
Series 785 limited express train

West Japan Railway Co.
Series 683 limited express train

East Japan Railway Co. East Japan Railway Co.
Series E2
Series E5 preceding
Shinkansen
train
production train

Hankyu Corporation
Series 9300 train
MetropolitanMtlit
IIntercity
t it Seibu
S ib Railway
R il
C
Co.,Ltd.
Ltd
Railway Co.,Ltd.
Series 30000 train
Series 2000 train

Kyusyu Railway Co.
Series 885 tilting train

Kyusyu Railway Co.
Series 800 Shinkansen train

Central Japan Railway Co./West Japan Railway Co.
Series N700 Shinkansen train

East Japan Railway Co.
Series E257 limited express train

Tobu Railway Co.,Ltd.
Series 50000 train

Tokyo Metro Co.,Ltd.
Series 10000 train© Hitachi, Ltd. 2010. All rights reserved.

93. Domestic Business(1) Rolling Stock Systems

Monorail : Majo
or Delivery Records
Straddle-type mon
norail (No.1 share)

Osaka Monorail Co.,Ltd.
１９９０～Tokyo Monorail Co.,Ltd
１９６４～

Kitakyushu Urban Monorail Co.,Ltd
１９８５～

Tokyo Tama Intercity
Monorail Co.,Ltd.
,
１９９８～

Yomiuri Land Monorail
１９６４～１９７８
Inuyama Monorail
１９６２ ２００８
１９６２～２００８
Okinawa Monorail Co.,Ltd
２００３～

Monorail in JapanJWorld Exposition(EXPO'70)
１９７０© Hitachi, Ltd. 2010. All rights reserved.

103. Domestic Business(1) Rolling Stock Systems

Aluminum Train Technology

A-train: A highly economical neext-generation train technology
Module Assembly

Delivery: About 1,700 trains
Lightweight and easy-to-recycle compared with steel

Overhead rack/ducts modulePow
wer consumption

１００
８０Side Ceiling module
weight45t(aluminum)

60t (steel)Seat module

Piping module
Wiring module(based on Hitachi’s Estimation)

Digital Manufacturing Technology
3-dimensional3diilmachining

Structural apertures
Hollowing-out
processing

ＦＳＷ※

Capacity of Kasado Transportation Systems Product Div.

60 trains/month (FY2008～)※ ＦＳＷ : Ｆｒｉｃｔｉｏｎ Ｓｔｉｒ Ｗｅｌｄｉｎｇ© Hitachi, Ltd. 2010. All rights reserved.

11

3. Domestic Business(1) Rolling Stock Systems

Inverter Teechnology

Small, lightweight and low-n
noise (world-class) inverters
New
e Productoduc

RemarksMore reliable system with smaller and lighter features
reducing the number of parts

Exterior

Easier Maintenance with unit-type built-in components
Smaller, lighter and less noisy with low-noise IGBTs*2and heat spreading and cooling system

No. off
N
Parts*1

６０

Weight*1

６４

Volume*1６６More precise control with high-performance microprocessors and high-response on-board control

Capacity of Mito Transportation Systems Product Div.

64 inverters/month (FY2008～)*1: Comparison with Hitachi’s conventional inverter (=100)*2: IGBTs: High-voltage insulated gate bipolar transistors, which arre core devices of large-capacity inverters© Hitachi, Ltd. 2010. All rights reserved.

123. Domestic Business(1) Rolling Stock Systems

Hybrid Tracction Technology

Hybrid traction system for Ki-Ha E200 Series
Energy-saving system for railways with liithium-ion secondary batteries(Joint development with East Japan Railw
way Company)
Lithium-ion
secondary battery

Regenerative en
nergy stored in the storage battery
during braking
EfficientEffi
ienergy con
ntroll hashbeen achieveed

On-boardOb d batteriesbi withihsuperior energy density

Storage battery＊

Reductionachieved
Main converter

60% reduction of the hazardous
substances in engine exhaust
30db reduction of noise（when stopped at a station）
Reduction of fuel consumption

East Japan Railway Company(Ki-Ha E200 series hybrid tra
ain)
*Com
mpared to the conventional diesel multiple units of East Japan Railway Company© Hitachi, Ltd. 2010. All rights reserved.

13

3. Domestic Business (2) Transport Manag
gement & Control Systems:

Delivery Recordss
Contributed to innovations of railway
y system with information technology
1960 1964

1970

1980

1990

2000

(Year)

Tokaido Shinkansen: Tokyo – Shin-Osaka startedsoperation (1964)
Sanyo Shinkansen: Shin-O
Osaka - Okayama section started operation (1972)
Toho
oku Shinkansen: Omiya – Morioka
Joetsu Shinkansen: Omiya – Niigata started operation (1982)

Business Support Systems supporting con
nvenient and comfortable customer services
Seat reservation system (MARS*)
Pioneering large-scale online system (1960)

IC card ticketing systems(2001)
Railway operation
information systems(2007)

Traffic management systems contributiing to safe, stable and high-density transport
Fi t real-time
First
l ti
conttroll systemtiin JJapan (COMTRAC)
Automated track control of trains in response to increase of number of trains (1972)

ＣＯＳＭＯＳMARS : Multi-Access Reservation System
COMTRAC : Computer Aided Traffic Control System
ansen
COSMOS : Computerized Safety Maintenance and Operation Systems of Shinka
ATOS : Autonomous decentralized Transport Operation control System(1995)

Expanding in series

ＡＴＯＳ(1996)© Hitachi, Ltd. 2010. All rights reserved.

14

3. Domestic Business(2) Transport Management& Control Systems

Business Support Systems: Delivery Record
Seat Reservationn System (MARS)

Railway Information System Co., Ltd. providees
Multi-Access Reservation System with high reliability,rand highg responsepsupportingpp
g various custom
mer needs
Delivery Records
・ＡＰ８０００×２ units
・ＵＮＩＸ Server ５０ units

IC Card Ticketing System

Railway Operation Information System

８００

The center system of IC card ticketing systemshare％supports the high reliability under expansion of
Public and private railway comppaniescustomers
ＪＲInteroperability●3 large projects in Tokyo and Kansai areas●4 projects in Hokkaido, Chubu and Kyushu(under development)
ＩＣＯＣＡ
West Japan Railway y

Tranpass
Nagoyaarea

５０

Information systems enable customers
share％
to see railway operations information
at a glance●Good Design Award 2007
(together with East Japan Railway)●Systems installed for East Japan Railway, West Japanrailway and Tokyo Metro Fukutoshin lines

ＫｉｔａｃａHokkaido Railway
Ｓｕｉｃａ
East Japan Railwa
ay
ＰＡＳＭＯ
Pasmo

ＮｉｍｏｃａNishi-Nippon Railroad

ＴＯＩＣＡ
Central Japan Railwway© Hitachi, Ltd. 2010. All rights reserved.

15

3. Domestic Business(2) Transport Management& Control Systems

Signaling/Traffic Ma
anagement Systems:
Delivery Record ①

JR railway companies
Traffic Management Systems

Digital ATC (Signaling)
旭川

Share

６０％

Share

小樽

◎

◎

◎ 室蘭

u line
Ou
◎

Ｏｍｉｙａ

青森

◎ 八戸

Yamagata Shinkanssen

Ｙａｍａｎｏｔｅ line◎

・ Tokyo Area Traffic Management
System (ATOS)
Jinbohara

ShinagawaTakayama line

Sakuragicho
Keihin Tohoku line

Hatori羽鳥

田端
Tabata花泉◎

Ikebukuro
池袋◎

Tokaido,Sanyo Shinkansen line
COMTRAC

近江塩津

◎ 岐阜
◎
新三田◎新大阪 ◎
古屋
米原
◎名古
◎ ◎草津
◎◎
◎上郡 ◎◎大阪 ◎加茂
豊橋
橋 新所原◎尼崎◎ ◎京橋
西明石 ◎
天王寺

◎ 和歌山

下関

◎
◎
博多 ◎
◎

黒磯

Joban line

◎

Ueno
上野

Shinjuku
新宿
Tokyo
東京

いわき

◎

高崎

Kofu

◎

Musashino line

Chiba

ShinagawaUchibo line
東京
甲府 新鶴見(操) ◎◎ 西船橋 （Soga～Tateyama）
◎

◎
猪
塩尻
金沢 ◎ 猪谷◎ ◎辰野

Takarazuka,Tokzai, Gakken Toshi line

Tohoku line

福島 ◎

◎

長野

Cyuo line

Kyoto,Kobe line

新潟

Shinetsu line

Kuroiso

Omiya

山形

◎

Ofuna

Tohoku, Joetsu,
Hokuriku
Shinkansen
COSMOS◎ 盛岡

及位TabataShinjuku
Negishi line

８１％

札幌

Chitose/Muroran line

・ Shinkansen lines
Tohoku/Joetsu Shinkansen
・ ConventionalCtil lilines◎

Hakodate lin
ne

岩間
◎

Yokohama
横浜

◎

Atami
Kurihama

Iida line

門司港

佐世保 ◎
長崎◎

KyushuShinkansenlSIRIUS中山香◎

Hanna line

◎荒木

Osaka Loop, Yamatoji andOsaka Outside Loop lines

◎新八代
袋

◎
◎

◎

南宮崎

鹿児島

Tokaido line

・ Centralized operations management systems
for Kyushu area
(JACROS)

JACROS : JR Kyushu Advanced and Concentrated Railway Operating Systems
ment
SIRIUS : Super Intelligent Resource and Innovated Utility for Shinkansen Managem
ATC : Automatic Train Control

Conventional lines
Shinkansen((Beingextended))（Plan to extend）*Share percentages are Hitachi estimates© Hitachi, Ltd. 2010. All rights reserved.

16

3. Domestic Business(2) Transport Management& Control Systems

Signaling/Traffic Ma
anagement Systems:
Delivery Record ②

Municipal and private railway companies
Private Railway Companies

Municipal Railway Companies
Share ６２％
Main line
Main line, other

Share ２８％

Nankai Electric Railway

Sapporo City
Transportation Bureau

Keihan Electric Railway

Semboku Rapid Railway Osaka Prefectural Urban Development

Karasuma line
Tozai line

Midousuji line
Kaigang lineSeishin-Yamate line

Port Liner
Rokko Liner

Nanakuma line
Airport line
Hakozaki line

Kyoto City
Transportation Bureau

Tokyo Metropolitan Government

Osaka City
Transportation Bureau

Kobe City
Transportation Bureau

Hibiya line

Yurakucho line

Tozai line

Chiyoda line

Namboku line

Hanzomon line

Marunouchi line

Saitama Railway Corp.

Saitama Railway line

Toyo Rapid Railway

Toyo Rapid Railway line

Tokyo Waterfront Area
Rapid Transit

Nagoya Seaside Rapid
R
RailwayWest Nagoya Port line

Ginza line

Fukutoshin line

Metropolitan Intercity Railway

Kobe New
TransitFukuoka City
Transportation Bureau

Tozai line
Namboku line

Nanko Port Town line
Tanimachi line

Toho line

Yokohama City
Transportation Bureau

Tsukuba Express

Rinkai line

Green line
Blue line© Hitachi, Ltd. 2010. All rights reserved.

17

3. Domestic Business(2) Transport Management& Control Systems

Digital AT
TC Technology

Digital ATC system supportinng safe and stable transport
Conventional ATC

Hea
adway reduction by single-stepsingle step braking control andopttimum braking control matched to train specificationchaaracteristics
Sinngle-step braking profile enables smoother deceleration
andd breaking
breaking, thereby providing better riding comfort

Transmits permitted speed information

90

75

75

40

Sav
ves space by simplifying the wayside units

0

Digital ATC

Reemarkable Technologies in Hitachi signaling system
Fail-safe technology using general-purpose computers:Highh functionality and extensionability by software technology

Transmits stopping point information

Datta communication using general-purpose digital signal
proocessor:
Simultaneous processing of 10 communication channels
Sizee reduction of equipment and easy improvement of functions* In Japan, ATC stands for ATP (Automatic Train Protection)in general© Hitachi, Ltd. 2010. All rights reserved.

18

3. Domestic Business(2) Transport Management& Control Systems

Traffic Management Systems Technology

Autonomous decentralized system technology●Autonomous decentralized systems
architecture■ Enables hierarchical system architecture■ Partial failure does not impact on entire system■ A complex control and the business of a large
station can be systematized(allotment with business at station and center)

Autonomous decentralized Transport Operation
control System (ATOS)■ World's Largest Real-time Control System
KuroisoJinbohara

Kofu

HatoriOmiya

Komagawa

Ikebukuro

Tachikawa
MitakaUeno

Shinjuku

Chiba
Tokyo

Shinagawa

Yokohama
Atami Ofuna

Plan to extend●General-purpose●Glcomputerstprovideid reall ti
time
control systems■ Better reliability and productivity of signaling
system■ Systematization of operations needed for safety
such as track maintenance

Kurihama

Computerized Safety Maintenance and Operation
Systems of Shinkansen (COSMOS)■ System Management of All Operations of Shinkansen

Ｓｈｉｎ－Ａｏｍｏｒｉ
Jyoetsu Niigata
Kanazawa

Ｈａｃｈｉｎｏｈｅ
Ｍｏｒｉｏka

Nagano Takasaki
Omoya
Tokyo

Planning line

© Hitachi, Ltd. 2010. All rights reserved.

19

3. Domestic Business

Strategies ①

Focus on new Shinkansen line (Rolling stocks/Signaling/Trainscontrol system)【Opening Schedule】
Hokkaido Shinkansen
Tohoku Shinkansen
Hokuriku Shinkansen
Kyushu Shinkansen

Shin-Aomori～Shin-Hakod
Shin
Aomori～Shin Hakod
date 2015
Hachinohe～Shin-Aomori
2010
Nagano～Kanazawa
2014Shin-Yatsushiro～Hakataa2011

Expand aluminum trains sales for municipal and private railway companies
・ Deeply involve existing customers’
customers plann for new trains
・ Develop new customers

Expand hybrid tracction system sales
・ Develop needs to retrofit existing diesell multiple-units© Hitachi, Ltd. 2010. All rights reserved.

20

3. Domestic Business

Strategies ②

Business Support Systems: Keep currrent position and further expansion■Keep share of seat reservation systems■Increase share of IC Card Ticketing Systemss and Railway Operation Information Systems■Firmly extend and update transport planningg and operations planning systems

Create new businesses by coollaborations with customers■Develop service
service-orientedoriented railway information control systems (fusing information and control technologies)
Expandcommunication channels toimprove services forindividuals and partners

Increase efficiencyof transport operations forcommand operations, railcar
operations, etc.

Improveenvironmental performance:
reduce CO2 andsave energy

Improve customer
systems, including station
services and on-board
railcar services

Implement optimum systems
to improve customer services

Business
Support

Rolling
Recognition of information
Stocks
Largeto extract systtem
Largeoptimization ru
ules
volumevolume(fusing information and control)
data
data
Information systems
Control systems

Mission critical cloudcomputing foundation

Strengthen IT platform

Traffic
Management

Electricity
conversion
and power supply

Highly reliable computing
foundation for real-time control

Strengthen control-system platform© Hitachi, Ltd. 2010. All rights reserved.

21

４. Overseas Businesss
Accelerate Globalization with Teechnologies Developed in Japan
TargetRevenue: ¥350 billion
Overseas revenue: over 60%
Operating income: 8%Strategies
Expand overseas business
Strengthen partnerships in Japan andoverseas■Focus on high-speed trains market(China, UK, Brazil, U.S. and others)¥350.0 billion

Transportt M
T
Managementt &Control Systems
Rolling Stock Systems¥176.7 billion

Over
seas

■Expand electrical components business(Strengthen partnerships with rolling stock
manufacturers)■Expand signaling/train control systems
business(China, UK and others by complying with
European standards)

Japan

FY２００８

FY２０１５（Target)■Expand monorail business(Mainly in emerging market)© Hitachi, Ltd. 2010. All rights reserved.

22

4. Overseas Business

Global Marrket

2005-07 ¥11 trillion -> 2014--16 ¥14 trillion (CAGR: 2.6%)
High growth in service and signaling//control
Huge market in Europe
Increase investments in emerging countries●Market size by segment

Others16%¥14 trillion
11 trillion¥11

Signaling/Sili /control

3.0
0%

2.75

2.9%

4.63

3.6%

3.88

4.75

2.3%

2005-20072014-2016

1.25

Infrastructure
Services(maintenance,
etc.)
Rolling Stocks

1.63

2.13

Asia &
Pacific
23%

By region
2014-16¥14 trillion

Europe38%

3.38

North America
23%
CAGR from 2007 to 2016

Resource: Based on UNIFE 2008 Report© Hitachi, Ltd. 2010. All rights reserved.

23

4. Overseas Business

UK
Class 395high speed train

Major Delivery Record

UKElectrical components forClass 465 commuter train

Bulgaria
Electrical components for
Sofia metro train

China
Electrical components forhigh speed train

China
Electrical components
for Beijing metro●
UAE
Palm Jumeirah Monorail

●
●

China
Electrical components
for Beijing metro

● ●
●●

●

Australia
Electrical components for
Sydney commuter train(Operations to start in 2010)

China
Chongqing Monorail●

Singaporeg p
Sentosa
Monorail

Australia
Electrical components fortilting train(Traction)
South Korea
Daegu MonorailSouth Korea
Express train named(Operations to start in 2014)“NOORIRO”© Hitachi, Ltd. 2010. All rights reserved. 24

4. Overseas Business

Strategies by Region
Focus on UK, China, High-speed Railways
andd Monorail Projects（１） UK
High-speed railwa
ays with maintenance services business
Signaling/traingg/control systems
ybusiness（２） China
Electrical compon
nents for high-speed railways
Si
Signaling/train
li /t i controlt l systemst（３） New markets
The Americas
Americas, India and Southeast Asia
（４）（
） Existingg marketss
Australia and South Korea© Hitachi, Ltd. 2010. All rights reserved.

25

4. Overseas Business（１） UK: History
H
Took 10 years for marketmentry with acquiring certificate
１９９９ Railway systemss manager stationed in London
２０００ First tender partticipation
２００３ Started trial operations of V-Train with
Hitachi’ss electriccal components
Hitachi
Trial completed with no accidents or failures(March 2005 as scheduled)

Ｖ‐Ｔｒａｉｎ

２００５ Awarded contract for Class 395 trains with maintenance
Established Hitachi Rail Maintenance (UK)R Europe)(Currently, Hitachi Rail
Achieved compliancce with UK/European
standards
Acquired safety
certification■Crashworthiness structure
Verified by supercomputer simulation
Crashwithinessstructure simulation

２００９ Started Class 39
95 passenger service© Hitachi, Ltd. 2010. All rights reserved.

26

4. Overseas Business（１）UK

Deliveryy Record

Delivery of Class 395 trains annd launch maintenance service
Contract：
174 cars (29 trains: 6 cars per trains) of C
Class 395 trains : ¥50.0¥50 0 billion
7 years Train maintenance (maximum 35 years):y¥20.0 billion(maximum ¥100.0 billion)

Railcar delivery ： Completed on schedulee
June 29, 2009: Preview service started (6 moonths ahead of schedule)
December 13, 2009 ：Official service started

Launch maintenance services： Establisheed Ashford Depot

OpeningO
i ceremony off
St. Pancras International
station (November 6, 2007)

C
Ceremony
off ClClass 395 train
t i
official service commencement(December 14, 2009)

A hf d D
AshfordDepott© Hitachi, Ltd. 2010. All rights reserved.

27

4. Overseas Business（１）UK

Strategies ①

Rolling stock with mainttenance service business
In February 2009, Selected as preferred bidderbfor Intercity Express Programme (IEP)■Project Overview
High speed trains (HST) replacement package(Rolling Stocks, maintenance and finance)- No. of cars to be delivered：Up to 1,400- Period of trains delivery：2013 – 2018
New-type train (image)

Existing HST train【 FutureF
P
Projects】
j】
Crossrail (About 600 commuter cars, schedulled delivery 2015 - 2017)
HS2 (UK high-speed railway, from London to Midlands, scheduled delivery after 2020)
HS2: High Speed Two

Establishment of loca
al manufacturing site
Under examination for IEP and future prrojects© Hitachi, Ltd. 2010. All rights reserved.

28

4. Overseas Business（１）UK

Strategiees ②
Electrical componentcRetrofit electrical components for Class 465 trains■ Contract in 2007: To complete delivery in April 20100
■ Contract details: 196 sets (94 trains), maintenance servicess(for 10 years)
March, 2010)■ Without accident for 2.8 million miles in operation (MExpand business to retrofit electrical com
mponents■ Respond to increasing future demand to retrofit ageing trains
Class 465 trains

Signaling/Train control System
In 2007, signed trial project with Network Rail■ Compliant with European standards■ Start trial runningg in 2012■ On-board units to be installed in IEP trainns© Hitachi, Ltd. 2010. All rights reserved.

29

4. Overseas Business（２） China: Market

World biggest railwa
ay systems market：Entire plan of high-speed line
(4 east-west and 4 north-south lines)

Harbin: High-speed lines already in operation(as of February 2010)：Region upgrading inter-city transport

Qinhuangdao
BeijingHigh-speed railways■ Plan to construct 18,000 km of high-speed lines(Plan called “4 east-west and 4 north-south lines”,～2020)■Expect to be placed orders for 3,000 highhigh-speed
speed(over 350 km/h) cars per year (for next 4-5 years)

Urban Transport■ Scheduled to construct 158 lines(10 000 cars through(10,000thh tot 2015)■Expect 15 tenders per year

Inter-city Transport■ Increasing demand in the future■ 20 train lines (6,000 cars through to 2050)

TaiyuanDalianTianjinShijiazhuang
Qingdao
Jinan

Zhengzhou

Lanzhou
Xian
ChengduChongqing

Shenyang

Xuzhou

Hefei
Wuhan

NanjingShanghaiHangzhou

NingboWenzhou

ChangshaFuzhouGuangzhou Xiamen
FoshanShenzhen
Zh h iZhuhai© Hitachi, Ltd. 2010. All rights reserved.

30

4. Overseas Business（２）China

Deliveryy Record

Electrical component
High-speed railways

High-speed railways■CRH2 rolling
lli stocks
t k andd electricall t i l componentst for
f Ministry
Mi i tof Railways (Awarded contract in 2004)
Delivered by China South Locomotive & Rolling Stock andJapanese consortium
Hitachi’s delivery: 24 cars and electrical components** 68 Main traction converter (for 17 trains)
752 air-conditioning equipments■For China South Locomotive & Rolling Stock’s CRH2(Continuous delivery since 2005):【Cumulative Delivery】
220 Main traction converters(for 35 trains)
1,520 air-conditioning equipments

Urban transport■Chinese Train■Chi
T i controlt l systemst(CTCS2) ffor Mi
Ministryi t off
Railways
On-board units for high speed trains[In collaboration with Beijing HollySys Co., Ltd.](Continuous delivery since 2005)【Cumulative Delivery】
170 trains (share: 70%)

On-board units

CRH2■ For Metros：【Cumulative Delivery 】
About 700 cars (for Beijing,
Shanghai, Xian and others)■ For Monorails：【Cumulative Delivery 】
Beijing metro No. 13 line
Chongqing No. 2/No. 3 lines (222 cars)
CRH: China Railway High-speed

Signaling/Train control system■Computerized-interlocking for Ministry of Railways[In collaboration with the China Academy ofRailway Science](Continuous delivery since 2007)【Cumulative Delivery】
In operation at over130 stations
Computerized-interlocking
Computerizedinterlocking
CTCS2: Chinese Train Control System Level2(for 250 km/h railway operation complying with European standard)© Hitachi, Ltd. 2010. All rights reserved.

31

4. Overseas Business（２）China

Strategies ①

Electrical component
High-speed railways

Signaling/Train control system
High-speed railways■ Awarded contract:
CRH3 (380km/h, for 400 cars) from China North
Locomotive & Rolling Stocks(FY 2010 – start of delivery)■ Target:g
CRH2 (380km/h) from China South Locomotive & Rolling
Stock■ Chinese Train control systems (CTCS3) for Ministry ofRailwaysAwarded contract:
High-speed line between Guanzhou and Shenzhen (113km)
Wayside units: 3 setsOn-board units: 40 trains[I collaboration[Inll bi withi h Beijing
B iji H
HollySysll S C
Co., LLtd.]d](Scheduled to start operation in 2010)■ Continuous expansion of computerized-interlocking(Target: 100 stations per year)【Future Targets】
High-speed rolling stocks (CRH2, CRH3)
Estimated demands: 3,000 cars/year【【Future Targets】】
Wayside units: 30% share from 18,000km in total
On-board units: 30% share from estimated 540 trains

Urban transport
Urban transport

CRH3■ Respond aggressively to vigorous demand■ Expand sales for Monorail■ Awarded contract for Chongqing No. 3 line
Train control system using 2.4 GHz radio frequency(Scheduled to start operation in 2011)■ Respond aggressively to vigorous demand
CTCS3: Chinese Train Control System Level3(for 350 km/h railway operation complying with European standard)© Hitachi, Ltd. 2010. All rights reserved.

32

4. Overseas Business（２）China

Strategies ②

Expansion of local production andd capacity of electrical component
I
Increase
capacity
it tto 130 setst per monthth ((after
ft 2011)
Hitachi Yonge
g Electric Equipment
q p(X(Xi'an)) Co.,, Ltd.
■ Established ： August 2003
■ Location ： Xian, China■ Capital ： 85 million yuan
Hitachi, Ltd
HitachiLtd.:: 40%
Hitachi (China), Ltd.: 10%
Yongji Xinshisu Electric Equipment Co., Ltd.: 50%■ Roles ：Manufacture of electrical component for roolling stock■ Employees ： 230■ Production capacity ： 50 sets per month© Hitachi, Ltd. 2010. All rights reserved.

33

4. Overseas Business（３） New Markets： The Americas

Sao Paulo monoraill■ Bidding process in conjuncttion with local construction companies■ Number of cars: 324 (Tirad
dentes line) ; 84 (Congonhas line)*There are some monorail prrojects in other cities (Manaus, Rio de Janeiro)

Brazil high-speed raailway(Rio de Janeiro – Sao Pauloo–Campinas: about 510 km)■ Participate as member of JapaneseJ
consortium■ RolesRoles: Design & manufacture of rollingstocks (and coopera
ate for traffic
management/train controlcsystem)■ Targeted to start operationn after 2015

カンピーナスリオデジャネイロ

サンパウロ

Source: Brazil Ministry of Transportation

U S high-speed
U.S.
high speed railway(11 lines planned)■ Intend to participate as meember ofJapanese consortium■ Gathering
G th i relevantlt iinforma
f
ti
tion
Source: US Department of Transportation© Hitachi, Ltd. 2010. All rights reserved.

34

4. Overseas Business（３） New Markets

Emerrging Market
Entry to Indian ma
arkets■ Train control systemss
・ Dedicated Freight WestW
Corridor(Project to be financced by yen loan; bidding scheduled in 2011)- Distance for yen loan: 1,468 km- Size of yen loan:¥450 billion■ Electrical componentss
・ Enter for Indian Raiilways and urban transport projects

Entry to Southeast Asian markets■ Target： Urban transp
port projects that integrated railway system
supplypp y is req
quired ((to be financed byy stepped
pp yyen loans))
・ Vietnam (Ho Chi Min
nh and Hanoi)
・ Indonesia (Jakarta)■ Aggressive participation in projects to upgrade railway infrastructuresi emerging
ini countriesti・ Partnerships in Japaan and overseas© Hitachi, Ltd. 2010. All rights reserved.

35

4. Overseas Business（４） Continuing Markeet
Australia■ Awarded contract for electtrical components for “double-decker” commuter trains
in suburbs of Sydney (in 2006, scheduled to start operation in late 2010)
・ Contract details: 312 setss (78 trains)
In collaboration with Dow
wner EDI Rail■ Target continuous contractts for electricalcomponents by strengthening partnershipwith Downer EDI RailSouth Korea■ Awarded contract for No. 3 line of Daegu Monorail (in 2009; scheduled to start
operation in 2014)・ 24 km track length (Double trrack)・ 30 stations
t ti
・ 2 depots
・ 84 cars (28 sets)
Local production by Woojin Indu
ustrial Systems(Korea) for mass-production cars
■ Work toward next projects in associationawithWoojin Industrial Systems© Hitachi, Ltd. 2010. All rights reserved.

36

５．Summmary

Target in FY2015

Revenue : ¥350 billion
ue : over 60%
Overseas revenu
Operating incom
me : 8%Accelerate Globalization with Technologies Developed in Japan© Hitachi, Ltd. 2010. All rights reserved.

37

Cautionary Sta
atement
Certain statements found in this document may constitute “forward-looking statements” as defined in the U.S. Private Securities Litigation Reform Act of 1995. Such “forward-looking
statements” reflect management’s current views with respect to certain future events and fina
ancial performance and include any statement that does not directly relate to any historical or
current fact. Words such as “anticipate,” “believe,” “expect,” “estimate,” “forecast,” “intend,” “plan,” “project” and similar expressions which indicate future events and trends may identify“forward-looking statements.” Such statements are based on currently available information and are subject to various risks and uncertainties that could cause actual results to differ materiallyfrom those projected or implied in the “forward-looking statements” and from historical trends. Certain “forward-looking statements” are based upon current assumptions of future events which
may not prove to be accurate. Undue reliance should not be placed on “forward-looking statemennts,” as such statements speak only as of the date of this document.
Factors that could cause actual results to differ materially from those projected or implied in an
ny “forward-looking statement” and from historical trends include, but are not limited toeconomic conditions, including consumer spending and plant and equipment investments in Hitachhi’s major markets, particularly Japan, Asia, the United States and Europe, as well as levels of
demand in the major industrial sectors which Hitachi serves, including, without limitation, the infformation, electronics, automotive, construction and financial sectors;
exchange rate fluctuations for the yen and other currencies in which Hitachi makes significant salessor in which Hitachi’s assets and liabilities are denominated, particularly against the U.S. dollar
and the euro;
uncertainty as to Hitachi’s ability to access, or access on favorable terms, liquidity or long-termm financing;
uncertainty as to general market price levels for equity securities in Japan, declines in which ma
ay require Hitachi to write down equity securities that it holds;
the potential for significant losses on Hitachi’s investments in equity method affiliates;
legislative and regulatory changes enacted by the new Japanese government;
increased commoditization of information technology products and digital media-related productss and intensifying price competition for such products, particularly in the Information &Telecommunication Systems, the Electronic Devices and the Digital Media & Consumer Products segments;
uncertainty as to Hitachi’s ability to continue to develop and market products that incorporate new technology on a timely and cost-effective basis and to achieve market acceptance for suchproducts;
rapid technological innovation;
the possibility of cost fluctuations during the lifetime of or cancellation of long-term contracts, forf which Hitachi uses the percentage-of-completion method to recognize revenue from sales;
fluctuations in the price of raw materials including, without limitation, petroleum and other mateerials, such as copper, steel, aluminum and synthetic resins;
fluctuations in product demand and industry capacity;
uncertainty as to Hitachi’s ability to implement measures to reduce the potential negative impacct of fluctuations in product demand, exchange rates and/or price of raw materials;
uncertainty as to Hitachi’s ability to achieve the anticipated benefits of its strategy to strength
hen its Social Innovation Business;
uncertainty as to the success of restructuring efforts to improve management efficiency by divesting or otherwise exiting underperforming businesses and to strengthen competitiveness andother cost reduction measures;
general socio-economic and political conditions and the regulatory and trade environment of Hitaachi’s major markets, particularly Japan, Asia, the United States and Europe, including, without
limitation, direct or indirect restrictions by other nations on imports, or differences in commercia
al and business customs including, without limitation, contract terms and conditions and labor
relations;
uncertainty as to the success of alliances upon which Hitachi depends, some of which Hitachi ma
ay not control, with other corporations in the design and development of certain key products;
uncertainty as to Hitachi’s access to, or ability to protect, certain intellectual property rights, particularlypthose related to electronics and data processing technologies;
uncertainty as to the outcome of litigation, regulatory investigations and other legal proceedingss of which the Company, its subsidiaries or its equity method affiliates have become or may
become parties;
the possibility of incurring expenses resulting from any defects in products or services of Hitachhi;
the possibility of disruption of Hitachi’s operations in Japan by earthquakes or other natural dissasters;
uncertainty as to Hitachi’s ability to maintain the integrity of its information systems, as well asa Hitachi’s ability to protect its confidential information and that of its customers;
uncertainty as to the accuracy of key assumptions Hitachi uses to valuate its significant employ
yee benefit related costs; anduncertainty as to Hitachi’s ability to attract and retain skilled personnel.
The factors listed above are not all-inclusive and are in addition to other factors contained in Hittachi’s periodic filings with the U.S. Securities and Exchange Commission and in other materials
published by Hitachi.

© Hitachi, Ltd. 2010. All rights reserved.