Business | IEC GENERAL MEETING IN TOKYO

Supporting IEC for overseas transportation business growth

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Established in 1921, Mitsubishi Electric Corp. is a Japanese multinational electronics and electrical equipment manufacturing company headquaretered in Tokyo.

The company, offering a spectrum of technologies such as robots, satellites, power generation equipment and home appliances is now making a stronger push into the overseas transportation business by supporting a global move to technology standardization.

“Our transportation business is a part of social infrastructure business and is considered a growth business (within the company),” said Takahiro Kikuchi, an executive officer in charge of Mitsubishi Electric’s public utility systems. “To expand our business overseas, we hope Japan will lead IEC standards.”

Mitsubishi Electric, which holds the No.1 position in Japan as a supplier of a variety of electrical equipment used for transportation systems such as traction motors and inverters with more than 50 percent market share, is keen to extend its reach beyond Japan to emerging markets, including India, Southeast Asia and Central and South America.

“We have to go into markets such as Southeast Asia where new routes will be built because we can’t expect new routes in Japan to emerge as the country’s birth rate is declining and the population is aging,” said Kikuchi.

Together with other Japanese companies and the government, Mitsubishi Electric supports IEC-led international standardization of technology — a key to supporting its technologies and products to meet demand from foreign customers.

Markets such as India, China and South Korea seek IEC-certified products and technologies. Kikuchi said: “In the past, we depended on JIS (Japanese Industrial Standards) and the IEC standards were barriers to our global expansion. But now, they are important.”

Japan is trying to lead IEC standards by developing an enhanced technology and seeking its adoption by the commission, rather than just following standards developed by foreign players. “We should not fight with our counterparts, but cooperate with them to make an agreement (on IEC standards),” said Shogo Shiomi, senior manager of Mitsubishi Electric’s standardization group.

Led by the government, Japan set up an organization to monitor and enhance its railway technology to meet international standards. The country also launched a facility to certify Japanese railway technology for safe operations overseas, rather than relying on foreign certification. In addition, a consulting arm established by several Japanese railway operators helps bring home-grown technology to overseas markets.

Such moves seem to be working out. While it is struggling to survive fierce competition in consumer electronics, Japan has an edge over its rivals in the race of high-speed trains. Some supply complete trains to Europe, others such as Mitsubishi Electric are strong in electrical equipment in the global market.

“Japanese technology has a reputation for safety and reliability,” said Kikuchi. In his view, Mitsubishi Electric is ranked fourth in the global market for electrical equipment, following the “Big 3” players: Bombardier Inc. of Canada, Siemens AG of Germany and Alstom SA of France.

Mitsubishi Electric, which has about 30 experts working to support IEC standards, drafted standardizations for an Ethernet-based train network system that integrates some electrical equipment such as motors and brakes to work as one system. In March, the draft was certified by the IEC as an international standard. Currently, Japan is working on standardization of “hybrid systems,” including a radio system, a train communication network, with an energy storage system to follow suit.

Behind Mitsubishi Electric’s prowess is also a self-made, high-power semiconductor. With its own chips, “we can develop various components ahead of others,” said Kikuchi. “That is our strength.” The use of such semiconductors, for example, helps reduce the size, weight and energy consumption of an inverter control system, leading to the efficient operation of trains.

Kikuchi thinks that Mitsubishi Electric and Infineon Technologies AG of Germany, hold about 80 percent of the global market for high-power semiconductors, with the two having equal shares.

Mitsubishi Electric’s train control and monitoring system (TCMS) — a “brain” to integrate various electric components to work as one system — has been well-received and holds a 70 percent share of the Japanese market. For over 50 years, the company has been developing and manufacturing electrical equipment for rolling stock, railway control and management systems and railway station facilities.

The company has exported electrical equipment for about 36,000 trains in 28 countries since it first exported traction motors and a brake system to Indian Railways in 1961. Today, the company holds approximately 70 percent of the Indian metro market, said Kikuchi.

Recently, it won an order for a converter-inverter system from a German railway company, marking the first entry into Germany by a Japanese supplier. “We hope to cut into that market,” he said. “Europe is the king of railway systems. They have the most advanced technology (in the world).” Entering the European market proves that Mitsubishi Electric has solid technology, he added.

Mitsubishi Electric’s assets also include local production and maintenance services. It has production facilities in the U.S., Mexico, Italy, Australia, China and two mother plants at home. In May, it opened a branch in New York to offer maintenance services locally.

Its transportation systems business is part of Mitsubishi Electric’s ambitious mid-term plans. The company is aiming to generate more than ¥5 trillion, or $46.2 billion, in revenue by the beginning of fiscal 2020, up from the ¥4.18 trillion planned for the current fiscal year.


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