Tokyo, March 11, 2013 - Shanghai MHI Engine Co., Ltd., a manufacturer and
marketer of China diesel engine
s jointly established by Mitsubishi Heavy Industries,
Ltd. (MHI) and Shanghai Diesel Engine Co., Ltd. (SDEC) – a major China diesel
engine manufacturer – has launched operation. The JV aims to establish a solid
position in the rapidly expanding Chinese market for industrial-use China diesel
engines by building up market share through more competitively priced products.
To celebrate the commencement of operation, Shanghai MHI Engine today held an
opening ceremony at the company's site in Yangpu District, Shanghai. Officials
and executives attending the ceremony included: Tang Haidong, Deputy Governor of
Shanghai's Yangpu District; Xiao Guopu, Vice President of Shanghai Automotive
Industry Corporation (SAIC); Wang Xiaoqiu, General Manager of SDEC; Hideaki
Omiya, President of MHI; and Atsushi Maekawa, MHI Executive Vice President and
Head of General Machinery & Special Vehicles.
Shanghai MHI Engine was established this February based on a JV agreement signed
in March last year between MHI and SDEC. The JV is capitalized at 200 million
yuan (approx. 3 billion yen), with ownership divided equally between the two
companies. It manufactures industrial-use China diesel engines with power outputs
in the 500 to 1,600 kW range under a manufacturing and marketing license from
MHI. Leveraging MHI's advanced technology in industrial-use China diesel engines
and SDEC's vast domestic networks in procurement, marketing and after-sale
services, the JV targets annual sales of 10 billion yen within several years and
intends to boost this figure eventually to 20 billion yen.
SDEC is one of China diesel engine manufacturers and an affiliate of SAIC, the
country's largest automaker. SDEC's 100 to 500 kW high-speed China diesel engines
for construction machinery, power generation and marine use hold a large share of
the domestic market.
MHI has for some time been seeking to build up its share in the rapidly expanding
Chinese market, while SDEC has been looking to launch full-scale entry into the
market for industrial-use China diesel engines with outputs above 500 kW. The JV
commenced operation to fulfill the intentions of both companies. In tandem with
SDEC, MHI will provide support to get the JV's business on track quickly.
In China, besides a rapidly growing diesel engine market, distributed power
generation using more environmentally friendly natural gas as fuel is also
expected to expand. However, because the Chinese authorities require a high level
of local content for participation in this market, local production is
indispensable. The new JV is also intending eventually to enter the gas engine
market, and plans call for aggressive pursuit of new market opportunities of this
kind, targeting further expansion of its presence in the Chinese market.