Hi-Lex to Dissolve US Subsidiary Amid Declining Demand

TOKYO, Jul 10 (Pulse News Wire) – HI-LEX Corporation (7279.T) announced plans to dissolve its subsidiary, HI-LEX America Inc., due to declining demand for control cables amid technological changes in the automotive industry. Established in 1975, HI-LEX America had struggled with shrinking sales and deteriorating profitability as electric vehicle trends reduced the need for traditional control cables.

Following thorough deliberation, the company decided to restructure its production activities within North America, leading to the dissolution of HI-LEX America. HI-LEX America, headquartered in Battle Creek, Michigan, was founded in April 1975 and primarily engaged in manufacturing and selling control cables for automobiles. Its capital amounted to $7 million. Over recent fiscal years, the subsidiary reported revenues of $95.9 million, $78.6 million, and $70.6 million for the fiscal years ending October 2023, 2024, and 2025, respectively.

Operating profit turned negative in 2024 and continued to decline, resulting in net losses of $3.3 million, $3.3 million, and $2.5 million for those respective periods. The restructuring process is expected to commence around 2028 once the realignment of production facilities is complete. As a result of the planned dissolution, HI-LEX anticipates recognizing special losses ranging from ¥10 billion to ¥15 billion in the fiscal year ending October 2026. The company stated that it would disclose the precise amount upon completion of its assessment.

Despite this move, HI-LEX remains committed to expanding its high-value product offerings in the United States while continuing its production and development activities in the auto parts sector.