Dow Jones Newswires
Mitsubishi Electric Corp. shares JP:6503 rose sharply Tuesday morning after the company announced the restructuring of its loss-making car equipment business.
Shares were recently 4.7% higher at 1,706.5 yen ($12.71) after rising as much as 5.4% earlier.
The company said Monday after market close that it would discontinue its car multimedia…
Mitsubishi Electric shares have gained after they announced a restructuring of their automobile parts related business.
The company plans to restructure its loss-making car parts business by forming two divisions, the Business Automation Solutions Division and the Integrated Automotive Systems Business. These two divisions will be under the newly-formed Automotive Electronics Business.
The restructuring is expected to bring greater clarity to the automobile parts market by focusing more on developing technology for intelligent cars, such as artificial intelligence and electric-vehicle batteries. It’s also expected to help the company to cut costs and increase profitability.
The restructuring comes as the automobile industry has been undergoing a major shift away from gasoline and diesel-powered engines towards electric and hybrid vehicles. Mitsubishi Electric aims to capitalize on this shift by investing in the automation and integration of electric-vehicle technology to automate the production and operation of vehicles.
Mitsubishi Electric already has experience in automation, robotics and other controllers, making it well-positioned to benefit from the industry’s shift to electric and hybrid vehicles.
The company has had some success in the automobile parts business, having recently receiving orders from Volvo and Jaguar to produce hybrid-vehicle powertrains.
The restructuring is expected to help the company boost its profits and gain greater market share as the electric and hybrid vehicle market continues to grow.
Investors will be pleased with these positive indications, as Mitsubishi Electric shares have gained 4.3% in response to the restructuring news. Analysts expect this increase to be maintained as the company focuses on its core capabilities and turns its attention to the rising market for electric-vehicle powertrains.