Mitsubishi Electric and auto parts supplier Aisin plan to set up a joint venture for electric and hybrid vehicle components, leveraging their combined scale for more efficient research and development as price competition intensifies.
The company, to be majority owned by Mitsubishi Electric, will develop and produce components such as energy-saving inverters. Mitsubishi Electric and Aisin will concentrate on their respective areas of expertise for more efficient research and development.
Mitsubishi Electric’s automotive equipment business, which includes power steering and advanced driver assistance systems, logged 944.1 billion yen ($6.03 billion) in sales last fiscal year. The company has been moving away from other products such as navigation systems and fuel injectors for gasoline-powered vehicles, concentrating resources into EVs.
The business was spun off in December into Mitsubishi Electric Mobility — which began operations in April — in part to facilitate cooperation with outside companies.
Aisin, an affiliate of Toyota Motor, makes powertrains, brakes and body components. It ranked as Japan’s second-largest auto parts company last fiscal year with sales of 4.91 trillion yen, behind only Denso.
Aisin is now the world’s top supplier of automatic transmissions, but demand for those will drop if EVs continue to gain ground. The company previously said it intended to ramp up strategic partnerships with other companies as it seeks to establish new growth businesses.
The auto industry faces pressure to adapt to new technologies and trends such as electrification and autonomous driving, pushing companies to spend heavily on R&D. Honda Motor plans to pour 10 trillion yen into in electric vehicles and software by fiscal 2030.
Meanwhile, China, the world’s biggest EV market, is dealing with overcapacity issues that are driving down prices, including for parts makers. Nidec is temporarily scaling back its E-Axle traction motor system business in China in a bid to improve profit margins.
