August 9, 2005 No.1071

MHI to Boost Automotive Turbo Production Capacity at MEE in Europe

Tokyo, August 9, 2005 - Mitsubishi Heavy Industries, Ltd. (MHI) is to strengthen its production capacity in automotive turbochargers in Europe to meet increasing demand in the European market. The company will boost its European production capacity by more than 40%, from the current 700,000 to 1 million units per annum (p.a.) by 2006. Specifically, MHI will invest roughly 1.1 billion yen into MHI Equipment Europe B.V. (MEE), a wholly owned production subsidiary in Almere, the Netherlands, to increase production capacity by 300,000 units p.a. With this initiative, MHI's total worldwide turbocharger production capacity will reach 3 million units p.a.

TD025 turbocharger     The additional investment into MEE aims at responding to expanding demand for turbochargers in the European market. Peugeot S.A. of France, for example, has requested an additional 200,000 units p.a. of MHI's small-size turbochargers (TD025, for 1.6 liter class diesel engines), besides the 500,000 units p.a. that MHI is already supplying to the automaker. In Europe, strengthening of emission controls is progressing at a fast pace, as illustrated by the decision to launch Euro V emission standards as a follow-up to Euro IV. Against that backdrop, demand for turbochargers enabling enhanced combustion efficiency in automobile engines is increasing sharply, thus making it necessary for MHI to expand its production capacity. MHI's decision to invest in MEE at this time is based on a strategy to respond to European needs with production bases near local customers. The move is also targeted at enabling faster response to local market needs, minimizing inventories, and circumventing currency exchange risks. The investment at MEE will involve the establishment of two new production lines: a processing line for turbine rotors, major components of small turbochargers; and a cartridge assembly line for assembling parts such as turbine rotors, compressor wheels and bearing housings. Both lines will be fully automated and feature the latest technology and equipment, such as electron beam welders, grinding machines and automated assembly devices. These advances will enable reduced production costs and enhanced product quality. With expansion of its production capacity at MEE, MHI aims to become the second-largest turbocharger manufacturer in the world by the end of fiscal year 2008. # # # 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 2,590 billion yen in fiscal 2004 (year ended March 31, 2005). 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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