Mitsubishi Electric Corporation Business Report FY ended Mar. 2014

Business Highlights

Financial Overview

(in millions of JPY)
  FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 Rate of
Sales 4,054,359 3,567,184 13.7 -
Operating income 235,172 152,095 54.6 -
Net income 153,473 69,517 120.8 -
Industrial automation systems
Sales 1,089,109 918,123 18.6 -Strong sales of new cars in North America and Japan; increased sales at OEMs in China, and favorable currency translation.
98,079 60,592 61.9 -

Management Strategy

Fundamental Management Policies
-The Mitsubishi Group will face challenging changes based on its corporate slogan "Changes for the Better", always looking for a better tomorrow along with pursuing sustainable growth and continuing advancing balanced management based on its pillars of ability to grow, earn profits, improve efficiencies, and remain stable.

-In 2013, the Company announced its new business strategy. Plans for its automotive equipment division include advancing development activities in the area of high-efficiency components for EVs and HVs as well as information and communication technologies. At the same time, the company is poised to optimize its production operations in Japan, Thailand and Mexico, aiming to increase sales at the division to 650 billion yen by FY2015, up 25 percent from current 520 billion yen. (From an article in the Nikkan Jidosha Shimbun on May. 21, 2013)

Management Objectives
-Always maintain a profit margin of 5% or more, a ROE of 10% or more, and a debit-to-equity ratio of 15% or more
-FY2013 (ended March 2014) performance ratios are as follows: profit margin of 5.8%, ROE of 10.9%, and a debt-to-equity ratio of 10.3%

Outlook for FY ending Mar. 31, 2015

(in millions of JPY)
  FY ending Mar. 31, 2015
FY ended Mar. 31, 2014
(Actual Results)
Rate of Change
Sales 4,180,000 4,054,359 3.1
Operating income 250,000 235,172 6.3
Net income 175,000 153,473 14.0

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


R&D Expenses

(in millions of JPY)
FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 FY ended Mar. 31, 2012
Overall 1,789 177,200 169,600
-Industrial automation systems 634 58,900 54,900

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.

R&D Activities

Industrial automation systems
-The Company is engaged in developing motors and related parts, mechatronics devices, FA control systems, automotive electric parts, electric power steering systems and parts, car multi-media devices, and other products.

-The Company successfully developed the following products during the fiscal year that ended March 2014.
  • Concept EV EMIRAI 2
  • Audio navigation system DIATONE SOUND. NAVI
  • Automotive electric supercharger
  • High output starter for heavy-duty diesel engines
  • Energy-saving driving support technology in onboard information systems

Product Development

Instrument Cluster
-The Company developed a new technology which sends navigation results from a smartphone to a display located near the vehicle's instrument cluster or a center console display. The new technology chooses the appropriate screen from the two displays to show information from the smartphone. Mitsubishi Electric developed car navigation units and in-vehicle displays in the past, but this is the first time that it has developed a technology for a vehicle's instrument cluster. The company intends to enter the car instrument market in 2016 with this new technology. (From an article in the Nikkan Jidosha Shimbun on November 29, 2013)

Intelligent GUI (Graphical User Interface)

-The Company announced that it has developed a liquid crystal display (LCD) module suitable for vehicles with an intelligent GUI (Graphical User Interface), a new product of its DIAFINE TFT-LCD modules for industrial use. A LCD module, a touch panel, and a graphics board are integrated in this one unit, which will save the cost for the separate software development. The company expects that this product will be used for meter panels and car navigation systems in vehicles. (From an article in the Nikkan Jidosha Shimbun on May 8, 2013)

Car Display
-The Company announced that it has developed a prototype car display system with an optical engine that can project images on curved, oval or triangular screens to suit a wide range of car interiors. The prototype system's single optical engine adapts to a wide range of surfaces, unlike conventional displays that require a designated optical engine designed for a screen's specific curves or shape. Natural, distortion-free images are projected on curved, oval or triangular surfaces through a screen distortion adjustment process that predicts the distortion of images caused by complex curves, and adjusts visual signal input. (From a press release on February 7, 2013)

New Silicon Carbide (SiC) Power Semiconductor Module
-The Company is developing a new silicon carbide (SiC) power semiconductor module for use in inverters installed on electric and plug-in hybrid vehicles. The company plans to start mass production as early as 2018. Utilizing SiC power modules contributes to reducing the size and weight of inverters for drive motors, while improving cooling efficiency. The company already launched the SiC power module for railway and industrial applications in May 2013. Projecting growth in demand from the automotive industry, which is moving towards electric mobility, Mitsubishi Electric is poised to accelerate the commercialization of the new power modules. (From an article in the Nikkan Jidosha Shimbun on July 9, 2013)

New Power Modules for Motors of EVs and HVs
-In 2013, the Company announced that it will start delivering samples of its two new J1-series power modules mainly for motors of EVs and HVs on September 30. The new products feature a compact 6-in-1 package, which reduces the inverter footprint to about 80 percent of the conventional three 2-in-1 J-series T-PM design. In addition, the 6th generation CSTBT (Carrier Stored Trench-Gate Bipolar Transistor) enables collector-emitter saturation voltage to be reduced by about 15 percent compared with the existing 2-in-1 products, contributing to low power loss. (From an article in the Nikkan Jidosha Shimbun on May 15, 2013)

New R&D Center

-The Company announced that it will construct a new engineering facility in Kikuchi, Kumamoto Prefecture, Japan, in order to accelerate the development of liquid crystal display modules for industrial and automotive products. The new facility will be built adjacent to the Shisui factory of Melco Display Technology Inc. (MDTI), Mitsubishi Electric's manufacturing subsidiary. In line with this project, Mitsubishi Electric plans to move the design and development division of its liquid crystal display business from an existing facility in Koshi, Kumamoto Prefecture to the new engineering center. Approximately JPY 1 billion (USD 9.7 million) will be invested in this project. The 4,000-square-meter facility is scheduled to start operations in January 2015. (From a press release on October 22, 2013)

Investment Activities

Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2014 FY ended Mar. 31, 2013 FY ended Mar. 31, 2012
Overall 173,968 164,626 167,500
-Industrial automation systems 48,550 53,376 45,271

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

Planned Capital Investment

(In millions of JPY)
FY ending Mar. 31, 2014
Main investment and its purpose
Overall 210,000 -
-Industrial automation systems 55,000 -Increase production of FA and automotive equipment.

Investments Outside Japan

-The Company will invest approximately JPY 7 billion in its U.S. subsidiary, Mitsubishi Electric Automotive America (MEAA). This investment will be used to increase the production of highly-efficient alternators and motor control units for electric power-steering systems. Assembly lines will be expanded at MEAA's Mason plant in Ohio, and at its Maysville plant in Kentucky. The company plans to achieve an annual production capacity of 1.3 million units for each product by 2016. While vehicle sales in the U.S. are recovering, regulations related to fuel economy are becoming increasingly stringent. The company aims to expand its business base in the U.S. by supplying efficient products which improve the fuel economy of vehicles. (From an article in the Nikkan Jidosha Shimbun on October 9, 2013)

-In 2013, the Company announced that it has established a new Mexican subsidiary, Mitsubishi Electric Automotive de Mexico, S.A. de C.V., in the State of Queretaro, Mexico. The subsidiary will build a new plant to produce automotive electric equipment, planning to start production and sales in October 2014. In Mexico, global automakers are boosting production capacity or making new entries, as vehicle sales are growing in both the U.S. and Latin America. Mitsubishi Electric is looking to win more orders from Japanese and U.S. carmakers through the new subsidiary, aiming to achieve annual sales of 30 billion yen in fiscal year 2017. (From an article in the Nikkan Jidosha Shimbun on Mar. 21, 2013)