March 8, 2004 No.0984

MHI To Commence Small-Size Engine Production in China

Tokyo, March 8, 2004 -- Mitsubishi Heavy Industries, Ltd. (MHI) and Shanghai T&E Industrial Co., Ltd. (T&E) of China have reached a technology licensing agreement relating to small-size, air-cooled 4-cycle gasoline engines and signed an agreement on March 6 in Nagoya, Japan. Based on the agreement, the production of engines, that are to be sold in Chinese market, will commence this summer. This will be the first time MHI is to produce general-purpose 4-cycle gasoline engines in China. MHI expects to produce 300,000 units in fiscal 2005, which will start on April 1, 2005.   Small-size, air-cooled 4-cycle gasoline engines       At the signing ceremony in Nagoya, Japan     In attendance at the signing ceremony were Pan Ya Ping, Chairman of T&E; Kototsugu Taniguchi, Director and General Manager of MHI's Industrial Machinery Division; and Akira Hishikawa, Deputy General Manager of MHI's General Machinery & Special Vehicle Headquarters. Under the agreement, three types of engines with maximum power outputs ranging from 1.8 kW (2.4 PS) to 4.4 kW (6.0 PS) will be produced. These engines have achieved one of the industry's optimal levels in low-noise operation while excelling in combustion efficiency, satisfying the emission regulations of both the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB). They are now widely used in applications relating to construction, agriculture, industry and landscape gardening. Because engines with outputs under 6.0 PS constitute the majority of horizontal-shaft type engines being produced globally, sales of these engines are expected to reach extremely large volumes despite the severe competition in this sector. MHI aims to strengthen its competitiveness by reducing production costs through local production; at the same time, it will enhance activities for marketing the engines to manufacturers of portable power generators and engine-driven washers in China, to expand overall sales. # # # About Mitsubishi Heavy Industries Mitsubishi Heavy Industries, Ltd. (MHI), headquartered in Tokyo, Japan, is one of the world's leading global heavy machinery manufacturers, with consolidated sales of 2,593 billion yen (US$21.6 billion) in fiscal 2002 (year ended March 31, 2003). 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)

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