Press Information

MHI Establishes Preparatory Unit toward Creating New Company
Dedicated to Car Air-Conditioner Business
-- Company Operations to be Launched in January 2013 --

No.1578
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Tokyo, September 27, 2012 - Mitsubishi Heavy Industries, Ltd. (MHI) has established "MHI Climate Control Co., Ltd." as a preparatory unit for creating a new company to be dedicated exclusively to business in car air-conditioners. Today MHI and MHI Climate Control signed an absorption-type company split agreement under which the latter company will take over MHI's car air-conditioner business, currently performed by its Air-Conditioning & Refrigeration Systems business headquarters, from January 2013. At that time MHI Climate Control will launch operations under a new corporate name. With creation of the new company MHI aims to establish a resilient and robust business structure to enable agile response to changes in this fiercely competitive market. It also seeks to accelerate global business development in a quest to secure a solid position in competition against existing companies dedicated to car air-conditioner business.

The new company will be comprehensively engaged in engineering, manufacturing, and sales of car air-conditioner products and service parts. The head office will be located within MHI's Air-Conditioning & Refrigeration Systems business headquarters in Kiyosu City, Aichi Prefecture. As the result of the business transfer, the new company will undergo a capital increase to 1 billion yen, with MHI maintaining full ownership. Kimiharu Takeda, Deputy General Manager of MHI's Air-Conditioning & Refrigeration Systems business headquarters, has been appointed to serve as the new entity's president.

The new company will commence operations with about 300 employees. Besides offering quick response to the rapid expansion of the automotive industry in the emerging nations and to intensifying price competition of car air-conditioning products resulting from the expansion, the new entity will strategically focus on markets expected to mark strong demand for electric and hybrid vehicles. Through these and other initiatives, it will aim to achieve annual sales of 60 billion yen within three years.

For some time MHI has recognized the need to further expand overseas production and to strengthen its cost competitiveness in the car air-conditioner business in order to respond to the globalization of automobile production by domestic customers, rapid market expansion in the emerging economies, and the sustained strength of the yen. The decision to establish a dedicated new company is MHI's way of responding to these multiple challenges, seeking further expansion of its car air-conditioner business through the achievement of more resilient and dynamic business operations.

MHI will work with the new company closely and is committed to supporting its business development fully by further enhancing the synergy benefits from its car air-conditioner business and other air-conditioning and refrigeration system operations.