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Mitsubishi Heavy Industries Aims to Double Defense Sales, Capitalizing on Geopolitical Tensions

Mitsubishi Heavy Industries anticipates defense sales to hit 1 trillion yen by 2026, bolstered by geopolitical challenges
Japan
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On Wednesday, Mitsubishi Heavy Industries (MHI) projected a substantial growth in its defense sales, foreseeing a doubling to 1 trillion yen ($6.7 billion) in fiscal 2026. The renowned defense and space contractor of Japan expects this surge to persist beyond 2029, as heightened geopolitical tensions contribute to increased demand.

Historically, defense sales for MHI had hovered around 500 billion yen over the past 25 years, restrained by Japan’s constitutional limitations on defense expenditure. However, a shift occurred last year when Prime Minister Fumio Kishida’s government initiated a significant upgrade to Japan’s defense capabilities in response to escalating security challenges from China, Russia, and North Korea.

The latest Japanese government strategy outlines a 56% rise in security spending through fiscal 2027, focusing on bolstering the nation’s defense capabilities. A key aspect of this plan is the development of domestic long-range missiles capable of covering distances exceeding 1,000 kilometers. MHI, traditionally focused on defensive preparations, is adapting to this new directive and aims to contribute to the development of these missiles.

MHI identifies defense as one of its primary focus areas over the next three years, alongside decarbonization and automation/autonomous technologies. CEO Seiji Izumisawa emphasized the company’s goal of achieving a 10% profit margin across all sectors.

In response to the heightened demand, MHI plans to increase its defense workforce by 20% to 30%, expanding from the current 6,000 to 7,000 employees. The company has already secured orders for various advanced weaponry, including extended-range Type 12 anti-ship cruise missiles, submarine-launched standoff missiles, hypervelocity gliding projectiles, and hypersonic missiles, set for delivery between 2026 and 2031.

Masayuki Eguchi, head of MHI’s defense and space segment, affirmed the company’s capability to manage multiple projects simultaneously, citing past experiences in developing diverse missile systems. The company plans to leverage existing platforms, such as missile launch systems deployed on Japanese warships, to facilitate the development of new systems.

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