MHI Increases Stake in MVDE, Small-size Diesel Engine JV in India,
To Enhance Financial Strength to Further Cultivate Rapidly Growing Market

MVDE was established in 2007 and has its head office and manufacturing plant in Mysore, an ancient city in south India's Karnataka state. Until now the JV has been capitalized at 415 million rupees (approx. 664 million yen), with MHI owning 90% and VTTL 10%. The recently completed capital increase added in 880 million rupees, with the entire amount borne by MHI. As a result MVDE's capital base has more than tripled to 1,295 million rupees (approx. 2,072 million yen), of which MHI now owns approx. 96.8%.

Under license from MHI, MVDE has been manufacturing and selling engines with less than 2,000 cc (cubic centimeters) displacement in India and neighboring countries. Demand for agricultural and construction machinery in India is robust, a situation that has attracted many foreign construction machinery manufacturers, including those from Japan. MVDE has won large-scale engine orders for installations in agricultural and construction machinery, and in response the JV is presently expanding its annual production capacity from 10,000 to 37,000 units. MVDE also looks to increase its local procurement ratio as a way of enhancing the cost competitiveness of its products.

VTTL, established in 1967, has its head office and manufacturing plant in Bengaluru, the capital city of Karnataka state. The company has annual production capacity of 25,000 power tillers, 5,000 tractors and 32,000 engines.

Going forward MHI will progressively expand MVDE's product portfolio to include large-size engines and generators incorporating those engines, and it will also strengthen the JV's functions to enable it to perform the full range of activities from development and design to marketing, procurement, manufacturing and servicing. Through these initiatives, MHI aims to develop MVDE into one of its core engine business bases, complementing established bases in Japan, Europe and China.