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MHI to Transfer Small-size Air-cooled Gasoline Engine Business to MES
Light, More Effective Operational Structure Expected

No.1520
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Tokyo, March 29, 2012 - Mitsubishi Heavy Industries, Ltd. (MHI) has decided to transfer its small-size, air-cooled, gasoline engine business - its Meiki Engine operations - to Mitsubishi Heavy Industries Engine Systems Co., Ltd. (MES) effective July 1. MES is a wholly owned marketing and service subsidiary of MHI located in Shinagawa, Tokyo, and reports to the parent company's General Machinery and Special Vehicles headquarters in Sagamihara. By concentrating all manufacturing and marketing activities related to small-size, air-cooled gasoline engines to MES, MHI aims to establish a light and more effective operational structure capable of responding to rapid changes in a crowded market, thereby enhancing the competitiveness of Meiki Engines.

MES will take over the relative operations from MHI through a so-called simplified absorption-type split. The transfer will cover all operations involving small-size, air-cooled gasoline engines with outputs ranging from 0.7 to 9.6 kilowatts, which are mainly installed in agricultural machinery and generators. As a result of this transfer, MES will handle all aspects of the Meiki Engine business, from manufacturing to marketing and product support. This new structure will streamline feedback to the production sector concerning customer needs and make related marketing activities more effective.

MHI will continue to handle the development of the next generation small engines. The market is rapidly shifting toward electric-powered devices and electronic-control technology, and MHI plans a company-wide effort bringing together the expertise of manufacturing, marketing and research & development divisions to make sure that next-generation Meiki Engines meet customer expectations.

MHI will also strategically locate production bases in order to ensure quicker responses to local market needs. For instance, engines for use in construction and agricultural machinery which require compliance to precise customer requests will be produced in Japan, while price-sensitive general-purpose engines will be manufactured in China.

Established in 2006, MES handles marketing and service activities related to diesel and gas engine power generation systems, industrial-use engines, marine engines and turbochargers.

MHI will work closely with MES and fully support the expansion of this business.