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| MITSUBISHI ELECTRIC ESTABLISHES
AUTOMOTIVE EQUIPMENT OPERATION IN CHINA |
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| -Company enhances its global supply framework for automotive
equipment- |
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TOKYO, February 26, 2002 ---
Mitsubishi Electric Corporation today announced plans to establish
a new company in June 2002 together with its Taiwan affiliate
Shihlin Electric & Engineering Corporation (Shihlin Electric),
for the purpose of manufacture and sale of electrical automotive
equipment* and related products in China. This move comes from
the need to rapidly establish a supply framework for equipment
and similar products in China.
The new company will be established as a Mitsubishi Electric
subsidiary through a reorganization, expansion and equity investment
in Changzhou Shihlin Electric & Engineering Co., Ltd., (Changzhou
Shihlin) a subsidiary of Shihlin Electric that manufactures
electrical components for motor vehicles in Changzhou City,
Jiangsu Province. |
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| * Automotive equipment: Electrical equipment required for
an engine to operate. Includes starter motors (used in starting
the engine), alternators (used to charge the battery), and distributors
(part of the ignition system). |
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| Purpose of establishing new company |
In the past five years, automobile production in China has
shown average annual growth of 7.3%, and demand is expected
to continue increasing as Chinese incomes rise. Last year, the
Chinese government also made plans to increase automobile production
by an annual average of 10.9% over five years. Given the circumstances,
automobile manufacturers have been actively moving into China
and increasing their production there since the second half
of the 1990s, and automobile component manufacturers have been
making similar inroads.
Mitsubishi Electric and Shihlin Electric already supply a wide
range of components and products to major world automobile manufacturers,
including components and products such as electronic control
equipment for automobiles. Determining that there needs to be
a rapid expansion of their framework for supplying automotive
electrical equipment and other products to automobile manufacturers
in China, the two companies have decided to establish a new
company through expanding the manufacturing and sales operations
of Changzhou Shihlin. Formation of a joint venture brings advantages
to both companies. Mitsubishi Electric benefits from utilizing
Shihlin Electric's human resources and expertise in the Chinese
market to rapidly establish operations in China, and Shihlin
Electric benefits by being able to use Mitsubishi Electric's
technology and sales channels to rapidly expand its business
in China.
The new company will commence with the manufacture of engine
equipment in 2002, and steadily increase the scope of its supplies,
including the possibility of expanding production in 2003 to
encompass electronic components.
The establishment of the new company will result in Mitsubishi
Electric having a total of 16 automobile component manufacturing
operations in America, Europe and Asia, including three in Japan—Himeji
Works (Himeji City, Hyogo Prefecture), Sanda Works (Sanda City,
Hyogo Prefecture), and Fukuyama Works (Fukuyama City, Hiroshima
Prefecture). |
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| Purpose of establishing new company |
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| (1) |
Name: (To be decided) |
| (2) |
Location: Changzhou City, Jiangsu Province, PRC (150
km west of Shanghai) |
| (3) |
Establishment: June 2002 (Application for registration
scheduled) |
| (4) |
Business activities: Manufacture and sale of automotive
equipment and electronic components |
| (5) |
Capital: US$ 2.6 million (Approx ¥310 million, US$
1 = ¥120) |
| (6) |
Shareholders: Mitsubishi Electric Corporation: 41%,
Mitsubishi Electric (China) Co., Ltd.: 10%, Shihlin Electric
& Engineering Corporation: 49% |
| (7) |
CEO: To be provided by Mitsubishi Electric |
| (8) |
Employees: Approx. 90 (2005) |
| (9) |
Sales projections: Approx. ¥4 billion (2005) |
| (10) |
Total investment (planned): Approx. ¥510 million
(including ¥240 million in the two years 2002 and
2003) |
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| Purpose of establishing new company |
| With over 80 years of experience in providing reliable, high-quality
products to both corporate clients and general consumers all
over the world, Mitsubishi Electric Corporation (FTSE: 6503q.l)
is a recognized world leader in the manufacture, marketing and
sales of electrical and electronic equipment used in information
processing and communications, space development and satellite
communications, consumer electronics, industrial technology,
energy, transportation and construction. The company has operations
in 34 countries and recorded consolidated group sales of over
US$33BN in the year ended March 31, 2001. Additional information
on Mitsubishi Electric is available at global.mitsubishielectric.com. |
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| For more information: |
Kanji Azuma
PR Dept. Media inquiries only
Mitsubishi Electric Corporation
03-3218-2346
Kanji.Azuma@hq.melco.co.jp |
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