Mitsubishi Electric_Business Report FY2008

Business Highlights

Financial Overview
- FY2008 FY2007 Rate of
Sales 3,665,119 4,049,818 (9.5%) Sales decreased in all segments.
139,728 267,205 (47.7%) -
Net income 12,167 157,977 (92.3%) -
Industrial automation systems division
Sales 851,688 1,017,503 (16.3%) While the automotive device business was steady, supported by strong production by Japanese automakers until the second quarter, orders received and sales fell below the previous fiscal year's level as a result of the sharp decline in global demand from September 2008 onward.
49,934 129,257 (61.4%) Operating income decreased due to decline in sales and other factors. 

Business Strategy (announced in May, 2009)

-The Company enhanced its global strategy in the automotive device business.

Reinforcement of product and business competitiveness

-The Company increased its share of alternators and starters in the global market with its world-leading technology for reducing size and weight and increasing output. (Market share of alternator: about 17%, starter: about 20%)

-The Company maintained its world No.1 share of about 40% in the market for electric power steering motors and controllers by having a broad product lineup for mini-vehicles and cars.

-The Company is accelerating development of "ISS/MG" and "HEV/EV IPU" aiming at improving fuel efficiency.

-As regard to car multimedia business, the Company enhanced its product development capability with its comprehensive technical capabilities utilizing synergy and expanded its global business by responding to the needs of customers sensitively. 

Enhancement of Global Business Promotion Structure

-The Company plans to expand and improve the production capabilities for alternators, starters and car multimedia products in Japan.

-The Company plans to reinforce production and sales capabilities in China, Thailand, Indonesia, the Philippines and India.

-The Company plans to reinforce production capabilities in North America, Brazil, central and East Europe and Russia.

Financial targets

-The Company targets building a strong combination of electric and electronic businesses, making the best use of the synergy effects created.

- Target FY2008 Remarks
profit ratio
More than 5%  3.8%
FY2004 : 3.3%
FY2005 : 4.1%
FY2006 : 5.7%
(the target was met)
FY2007 : 6.5%
(the target was met)
(Return on equity)
More than 10%  1.3% FY2004 : 10.8%
(the target was met)
FY2005 : 11.5%
(the target was met)
FY2006 : 12.3%
(the target was met)
FY2007 : 15.1%
(the target was met)
Ratio of debts payable Less than 15% 20.3% FY2004 : 23.9%
FY2005 : 20.9%
FY2006 : 18.6%
FY2007 : 15.8%


R&D Structure

- The Company conducts its development activities, which include areas from basic research, application research, product planning, up to production engineering at its research centers in Japan, the U.S., and Europe, and in addition, at the development divisions at its plants and consolidated subsidiaries. It also carries out joint development activities with universities and research organizations at home and abroad.

- The Industrial Automation Systems Division focuses its development activities in the areas of automotive electric equipment, electric power steering systems and related products, and car multimedia products. 

R&D facilities in Japan (Automotive business)
Facility Location Remarks
Automotive Electronics Development Center Himeji,
Hyogo Pref.
Application research
Himeji works Himeji,
Hyogo Pref.
Product development
Sanda works Sanda,
Hyogo Pref.
Product development
Fukuyama works Fukuyama,
Hiroshima Pref.
Product development

R&D Expenses (in billion JPY)
- FY2008 FY2007 FY2006
Overall 144.4 148.7 132.7
Industrial automation systems 37.7 37.0 28.2
% 26.1% 24.9% 21.3%

R&D Activities (FY2008)

The Company has developed a compact intellectual property (IP) core for high-speed processing of graphics. Text and graphics are shown on display panels in built-in display systems for a variety of equipment. However, because of limitations to the maximum size and power consumption of built-in display systems, it has been difficult to get satisfactory levels of graphic quality and processing speed on the display panels. The new IP core is one of solutions to such problems. It has now become possible to improve quality of graphic images on displays and increase speed of processing information. It plans to utilize its graphic IP core in equipment not only for car navigation and audiovisual systems, but also for railroad transportation. The IP core is design information to illustrate circuit structure. The new technology is expected to upgrade graphic user interface. The Company has improved its own software technology of "Saffron" so that it can provide improved images even in a computer with a low memory capacity. It has also developed "Sesamicro," a high-speed vector processing IP core, which can provide high-level display capacity to match its high-definition quality. (From an article in the Nikkan Jidosha Shimbun on Feb. 14, 2009)

Investment Activities

Capital Expenditure (in million JPY)
- FY2008 FY2007 FY2006
Overall 150,128 159,370 153,423
Industrial automation systems 44,655 50,230 43,358
% 29.7% 31.5% 28.3%

The Industrial Automation Systems Division focused its investment activities on increasing production of automotive equipment, and on factory automation systems.

Capital investment projects for FY2009

- FY2009 Main investment and its purpose
Overall 120,000 -
Industrial automation systems 26,500 Rationalization of automotive devices, etc.
% 22.1% -

The Industrial Automation Systems Division will continue its investment focus on expanding production at the Automotive Equipment Group and the Factory Automation Systems Group.