Mitsubishi Electric Corp. shares
6503,
rose sharply Tuesday morning after the company announced the restructuring of its loss-making car equipment business.
Shares were recently 4.7% higher at 1,706.5 yen ($12.71) after rising as much as 5.4% earlier.
The company said Monday after market close that it would discontinue its car multimedia business, which includes car navigation systems, and spin off its automotive-equipment business.
The Japanese electronics maker said it was aiming to set up a new car-equipment company within one year, but the specific method and other details hadn’t been finalized.
Mitsubishi Electric said it would hope to work with partners on electrification and advanced driver-assistance systems as they have promising market potential and require high levels of investment.
The company would also focus on cost cuts for its electric power-steering system business and review business terms with clients, it said.
In February, Mitsubishi Electric projected its car equipment business would post an operating loss of Y28.0 billion ($208.6 million) for the fiscal year ended March 31, following Y31.5 billion operating loss in the prior fiscal year.
The company is scheduled to report its fiscal-year results on Friday.
