Mitsubishi Electric to boost production

Mitsubishi Electric to boost production

TOKYO (AFP): Japan's Mitsubishi Electric Co. Ltd. said yesterday it would expand production of automotive electronics in Southeast Asia and raise local content to help protect from foreign exchange fluctuations.

"The rapid development of the automobile industry in Southeast Asia suggests long-term sustained market growth in the future," Mitsubishi Electric said in a statement.

"There is also a fear that protectionists could gain power in Southeast Asia as many nations are suffering from economic crisis and some recently carried out currency devaluation," it said.

It noted Indonesia's decision to impose a more rigid local procurement requirement for foreign-based manufacturers from next year.

Mitsubishi Electric said that to take advantage of market growth and to provide a buffer against "unpredictable economic and regulatory conditions in the region" it had decided to strengthen its production system.

The company also wanted to make more effective use of the ASEAN Industrial Cooperation Scheme (AICO) promoting cooperation among its members of the Association of Southeast Asian Nations and reducing import-export tariffs to five percent or less in the region.

Mitsubishi Electric, which has been producing automotive electronics in Thailand, Indonesia, the Philippines and Malaysia since 1984, said it planned to invest a total of 3.0 billion yen (US$25 million) over a three-year period, focussing on key product areas of alternators and starter motors.

Production of starter motors and alternators would be doubled in Indonesia and Thailand, with the local content ratio to be raised in Indonesia as well as Malaysia, it said.

Exports of component parts manufactured in the Philippines were increasing.

Mitsubishi Electric said it would produce 800,000 units each of alternators and starter motors at its four Southeast Asian plants and it aimed to cut manufacturing costs by sharing production among the plants.

Mitsubishi Electric said it would set up a production system "immune to foreign exchange rate fluctuations by increasing local content percentages from the current 35 percent to more than 50 percent over the four production sites. "