-Company enhances its global supply framework for automotive equipment-

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.

* 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).


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).

Profile of New Company

About Mitsubishi Electric Corporation
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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