March 28, 2005 No.1051

MHI to Produce Engine Valves in Liaoning, China In Joint Venture with Shenyang Aerospace Xinguang Group

Tokyo, March 28, 2005 - Mitsubishi Heavy Industries, Ltd. (MHI) has concluded an agreement with Shenyang Aerospace Xinguang Group, a Chinese automobile engine manufacturer, on establishing a joint-venture company in Shenyang, Liaoning province, to produce engine valves. The establishment of the new enterprise, to be named Shenyang Aerospace Xinguang Mitsubishi Heavy Industries Engine Valves Co., Ltd., is targeted at attracting new customers by locating directly within the booming Chinese automobile market. The new facility, slated to go onstream this October, will have a production capacity of 10 million valves the first year and 30 million units by 2008.

Signing ceremony in Shenyang To the following photograph     The new company will be established in Shenyang's Hunnan New District, centered on which many major foreign automobile and engine manufacturers, including Japanese, American and European firms, have bases. The company will be capitalized at 82 million Chinese yuan (approximately 1.1 billion yen), with Shenyang Aerospace Xinguang Group owning a 35% stake and MHI and Mitsubishi Heavy Industries, (Hong Kong) Ltd. (MHIH) each holding 32.5% stakes. Construction will get under way in April and is scheduled for completion in October. Operations will commence with 161 workers, and payrolls will expand to more than 300 within two years. MHI will assign a president as well as heads of manufacturing and administration. The inaugurating board chairman will be Wang Xiuchang from Shenyang Aerospace Xinguang Group. Shenyang Aerospace Xinguang Group is a core company of China Aerospace Science and Industry Corporation (CASIC), a major industrial conglomerate that employs roughly 100,000 workers in more than 180 companies. Besides automobile engines, the Group manufactures a full spectrum of automobile parts. The Group's engines are rated especially highly for their technological excellence, and for that reason they are listed as an officially recommended product of Liaoning province. The Group also boasts a strong and reliable sales network and robust marketing capability - factors that gave MHI confidence that the Group would be an ideal business partner. In tandem with active initiatives by the Liaoning government to attract auto-related companies to the province, the new venture will also receive various preferential treatments, including corporate tax incentives. At home, MHI has established a fully integrated automated production system for engine valves, encompassing everything from material cutting to inspection and shipment of completed parts, enabling realization of a world-class quality, cost and delivery (QCD) structure. The new joint venture in Shenyang will receive this technology and know-how, and will produce valves of the same high quality in China. The valves will be supplied to major local automobile and engine companies, including Shenyang Aerospace Mitsubishi Motors Engine Manufacturing Co., Ltd., a joint venture with Mitsubishi Motors Corporation. Major carmakers currently expanding into the Chinese market are striving to boost their local procurement ratios. Especially, they are working to secure parts for new engines under development to conform with 2006 Euro III emission standards. Riding the tail wind of these moves, the new joint venture will aim for robust market share expansion in the booming Chinese market. # # # About Mitsubishi Heavy Industries Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in Tokyo, Japan, is one of the world's leading heavy machinery manufacturers, with consolidated sales of 2,373 billion yen in fiscal 2003 (year ended March 31, 2004). MHI's diverse lineup of products and services encompasses shipbuilding, steel structures, power plants, chemical plants, steel plants, environmental equipment, industrial and general machinery, aircraft, space rocketry and air-conditioning systems. For more information, please visit the MHI website (http://www.mhi.co.jp). PRESS CONTACT: Hideo Ikuno: h.ikuno@daiya-pr.co.jp Tel: +813-6716-5277, Fax: +813-6716-5929 Daiya PR (in charge of public relations for Mitsubishi Heavy Industries, Ltd.)

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