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MHI to Boost Turbocharger Production Capacity Worldwide, Aiming


MHI to Boost Turbocharger Production Capacity Worldwide, Aiming for 10 Million Units/Year Production Structure

1st Stage: Near 11 Billion Yen Investment into Global Production Bases, in Quest to Acquire Top Market Share

Tokyo, Aug 6, 2013 - (JCN Newswire) - Mitsubishi Heavy Industries, Ltd. (MHI) is taking steps to strengthen its global turbocharger production capacity, ultimately targeting a structure enabling production of 10 million units per annum (p.a.). As the first stage, the company intends to invest a total of 11 billion yen into its overseas production bases to boost its worldwide production capacity from the current 5.8 million units p.a. to 8.9 million by 2015. By enhancing its production capacity MHI aims to respond to rapidly expanding global demand for turbochargers amid spreading adoption of tighter fuel efficiency requirements. The company is also planning further investments toward its final goal of achieving a production structure capable of 10 million units p.a. Through these cumulative investments, the company ultimately aims to move swiftly toward securing a position as the world leader in the automotive turbocharger market.

New initiatives will also be implemented with respect to development, manufacturing and marketing. In terms of development, the company is looking to develop next-generation turbochargers as a way of carving out new markets. The forthcoming innovations will be a "New Concept Turbocharger" achieving the world's highest efficiency level and an "electrically driven two-stage supercharging system (turbocharger)" enabling further downsizing of gasoline engines. To carry out these development programs, Mitsubishi Turbocharger and Engine Europe B.V., MHI's wholly owned production base in Europe, is to be elevated to the company's No.2 development base, second only to its corresponding facilities in Japan, offering local customers enhanced development support.

Relevant to manufacturing, the company will pursue further automation of installations at its production bases, particularly those in Japan. It will also push to achieve a flexible production structure with four focal points - Japan, North America, Europe and Asia - in a quest to strengthen cost-competitiveness further. In addition, going forward final product assembly will be performed at bases close to each product's market. By creating a locally responsive support structure, the company will be able to respond to diverse market needs precisely and with short delivery schedules.

A breakdown of the near 11 billion yen investment planned in the first investment phase is as follows. A significant portion of the total sum will be allocated to Mitsubishi Turbocharger Asia Co., Ltd. (MTA), its wholly owned turbocharger subsidiary in Thailand, to further strengthen MTA's production structure for cartridges, the core components of turbochargers. Specifically, annual cartridge production capacity will be increased more than 2.5-fold by 2015 through substantial expansion of parts processing lines and cartridge assembly lines. The cartridges produced at MTA will be supplied to MHI's final assembly bases in Europe, China and elsewhere. Additionally, because demand for turbochargers is also increasing from automobile and truck manufacturers with production bases in Thailand, final assembly lines will also be substantially increased, to double production capacity by 2015.

Shanghai MHI Turbocharger Co., Ltd. (SMTC), a turbocharger production and marketing company originally established jointly by MHI, Sumitomo Corporation and Shanghai Diesel Engine Co., Ltd. (SDEC), became a consolidated subsidiary of MHI this June through acquisition of a portion of shares formerly owned by Sumitomo Corporation. MHI now plans to increase SMTC's capitalization and to progressively expand its production lines. In doing so, MHI looks to expand SMTC's turbocharger production capacity roughly threefold by 2015 and fourfold in 2016.

In the U.S., MHI is currently in the process of establishing a local turbocharger production facility in Indiana in the form of a production plant of Mitsubishi Engine North America, Inc. (MENA), a wholly owned engine and turbocharger marketing subsidiary serving North America, aiming for commercial production launch in the autumn of 2014. The U.S. production plant will function as a key base in MHI's global turbocharger production structure. Under the investment program announced today, the plant will initially have a production capacity of approximately 600,000 turbochargers p.a., to be progressively doubled by 2016. Sales are to be targeted at the major U.S. auto manufacturers and the North American production bases of Japanese and European automakers.

In tandem with the expanding adoption of tighter fuel efficiency regulations - for example, Corporate Average Fuel Economy (CAFE) regulations in the U.S. - market demand for turbocharged engines, especially gasoline engines, is increasing rapidly. In light of this market trend, MHI will continue to make necessary investments in a quest to attain the top share in the global market for automotive turbochargers.

About Mitsubishi Heavy Industries

Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in Tokyo, Japan, is one of the world's leading heavy machinery manufacturers, with consolidated sales of 2,820.9 billion for the year ended March 31, 2012. MHI's diverse lineup of products and services encompasses shipbuilding, power plants, chemical plants, environmental equipment, steel structures, industrial and general machinery, aircraft, space rocketry and air-conditioning systems. For more information, please visit the MHI website at www.mhi.co.jp.

Contact:

Mitsubishi Heavy Industries Hideo Ikuno h.ikuno@daiya-pr.co.jp +81-3-6716-5277

Copyright 2013 JCN Newswire. All rights reserved. www.japancorp.net

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