Mitsubishi Electric Corporation Business Report FY2009

Business Highlights

Financial Overview

(in million JPY)
  FY2009 FY2008 Rate of
Sales 3,353,298 3,665,119 (8.5%) Sales decreased in all segments.
94,302 139,728 (32.5%) -
Net income 28,278 12,167 132.4% -
Industrial automation systems division
Sales 733,132 851,688 (13.9%) The volume of new orders and sales at the Automotive Equipment Group decreased year-on-year because of a slowdown in demand worldwide that lasted until the second quarter of fiscal year 2009. This was in spite of the Company's efforts to enhance some of its product variations, as the Company conducted sales promotions worldwide.
26,138 49,934 (47.7%)

Business plan

The Company will begin in earnest to expand its auto parts business in emerging countries. In China, which has become the world-largest automobile market in 2009, it will accelerate its sales expansion efforts targeting local and European automakers. It plans to increase sales, mainly of alternators, starter motors and peripheral parts for electric power steering, which it has supplied to Japanese automakers. In India, the second growth-expected market after China, it will reinforce its relationship with Maruti Suzuki India Ltd., which it has already business with. The Company has the principle of "local production for local consumption" concerning products for emerging markets. It will therefore increase the local production capacity according to each market's automobile sales growth. (From an article in the Nikkan Jidosha Shimbun on Jan. 14, 2010)

Business Strategy (announced in May 2010)

The Company aims to expand the business of its Automotive Equipment Group by building regional strategies that react to market changes and finding global applications for its product strategies.

Improving its competitive edge through enhanced development activities based on the following key phrases: "environment and energy-saving” and “information communication"

Alternators and starters:
The Company will develop and release alternators and starters that will meet the needs for ISS, energy regeneration, higher efficiency, smaller in size, and lighter in weight. It will also pursue other features to make vehicles more fuel efficient. 

IPMs (Intelligent Power Modules):
The Company will improve the competitive edge of its products by leveraging the synergy effects of its technology on semi-conductors and on-board features in the growing HEV and EV markets.

Motor controllers for EPS  (Electric Power Steering) systems:
The Company will develop a competitive product lineup that meets the needs for making vehicles more fuel efficient.

Car multimedia:
The Company will develop multimedia products with greater ability to communicate with on-board units. It will also develop exterior equipment so as to meet the needs for making car navigation systems on-board information centers.

Global Strategy

Japan, the U.S. and Europe: 
The Company will provide products featuring high efficiency and advanced technology so as to meet the needs for making vehicles more electric-driven, more fuel efficient, safer, and more comfortable.

China and India:
The Company will work to set up production operations in and develop an R&D strategy for China and India in order to improve its competitive edge in these emerging-market countries.

Financial targets

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

- Target FY2009 Remarks
profit ratio
More than 5%  2.8% FY2004 : 3.3%
FY2005 : 4.1%
FY2006 : 5.7%
(the target was met)
FY2007 : 6.5%
(the target was met)
FY2008 : 3.8%
(Return on equity)
More than 10%  3.1% 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)
FY2008 : 1.3%
Ratio of debts payable Less than 15% 16.7% FY2004 : 23.9%
FY2005 : 20.9%
FY2006 : 18.6%
FY2007 : 15.8%
FY2008 : 20.3%

Performance forecast

(in billion JPY)
- FY2010
Sales Operating
Sales Operating
Sales Operating
Overall 3,480.0 140.0 3,353.2 94.3 3,665.1 139.7
Industrial automation systems 820.0 49.0 733.1 26.1 851.6 49.9

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)


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)
- FY2009 FY2008 FY2007
Overall 133.7 144.4 148.7
Industrial automation systems 34.7 37.7 37.0
% 26.0% 26.1% 24.9%

R&D achievements (FY2009)

The Company developed the following: HDD car navigation systems that have an option for setting up DSRC service; DSRC on-board units; next-generation, direct-mounted power units for HEV transmissions; engine control units for vehicles with an idling stop feature; in addition to others.

Investment Activities

Capital Expenditure

(in million JPY)
- FY2009 FY2008 FY2007
Overall 102,767 150,128 159,370
Industrial automation systems 22,911 44,655 50,230
% 22.3% 29.7% 31.5%

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


Capital investment projects for FY2010

- FY2010 Main investment and its purpose
Overall 150,000 -
Industrial automation systems 30,000 Increase and rationalize production of automotive equipment
% 20.0% -

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