Mitsubishi to accelerate R&D, capital spending
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Japanese automaker Mitsubishi is planning to inject more than 600 billion yen ($5.35 billion) in capital spending and research and development (R&D) over the next three years through fiscal 2019 in a bid to turn around its business after recent scandals, the Nikkei said.
The new plan calls for spending 5 percent of annual sales on equipment and the same proportion on R&D.
Funds will be used by the company for the development of electrified vehicles and for production in China and Indonesia.
Mitsubishi Motors will release the specifics of the capital injection in a new medium-term plan due Wednesday, the business daily said.
Questions & Answers
Q.What is the total amount Mitsubishi plans to invest and over what period will this spending occur?
What is the total amount Mitsubishi plans to invest and over what period will this spending occur?
Mitsubishi plans to invest more than 600 billion yen, equivalent to $5.35 billion, in capital spending and R&D. This investment will take place over the next three years, through fiscal 2019.
Q.What is the primary motivation behind this significant increase in spending by Mitsubishi?
What is the primary motivation behind this significant increase in spending by Mitsubishi?
The primary motivation for Mitsubishi's increased spending is to turn around its business following recent scandals. This injection of funds aims to revitalise the company's operations and prospects.
Q.On which key areas will Mitsubishi focus its capital spending and R&D efforts?
On which key areas will Mitsubishi focus its capital spending and R&D efforts?
Mitsubishi will focus its funds on two main areas. These are the development of electrified vehicles and expanding production capabilities in both China and Indonesia.
Q.What proportion of its annual sales will Mitsubishi dedicate to equipment and R&D under the new plan?
What proportion of its annual sales will Mitsubishi dedicate to equipment and R&D under the new plan?
Under the new plan, Mitsubishi will dedicate 5 percent of its annual sales to equipment. The company will also commit the same proportion, 5 percent of annual sales, to research and development activities.