Nidec will open new offices and start production of electric motors in Serbia, says COO Jun Seki. Nidec takes an aggressive stance regarding emerging trends related to electric vehicle (EV) markets.
Nidec initially began as a small precision motor company for HDDs in information equipment before expanding through mergers and acquisitions into industrial and automotive markets.
1. Nidec’s Diversification Strategy
Nidec, as a conglomerate that handles “everything that spins and moves,” offers several lines of business. However, its core business lies with electric motors used to power industrial equipment, electronics and even cars. Nidec’s business strategy entails diversifying its portfolio to ensure continued growth over time.
Nidec was established as a small precision electric motor sales company in 1973, but has grown into one of the leading comprehensive electric motor manufacturers, producing over 100 million units annually and producing medium-size motors, large motors, as well as small precision motors for applications including elevators, office equipment, automotive and others.
Nidec has made numerous acquisitions to broaden its business portfolio. For instance, Tosok and Kyori Kogyo provide advanced measuring technology respectively while Nidec’s press technologies for punch motor cores come from Kyori Kogyo Press Technologies and Kyori Kogyo Press Technologies respectively. Furthermore, Nidec is developing technologies like ferrite cores and permanent magnet materials as part of its long-term growth strategies; diversification ensures Nidec doesn’t miss emerging markets or technological trends which otherwise might go unnoticed by competitors.
Nidec has also invested in increasing production capacity across Europe to meet growing demand for electric vehicles. Recently, they opened a factory in Novi Sad, Serbia with plans to begin series production of car electric motors beginning 2023. Nidec COO Jun Seki stated that choosing Serbia was due to long-term goals; specifically citing their abundant workforce as well as non-member status of European Union as reasons why this country made sense as their first European location for their first facility.
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2. Nidec’s Strategy to Become a Global Company
Nidec Corporation is an international conglomerate that offers products for everything that spins or moves, such as industrial motors, automotive motors and AC inverters. They’re known for creating innovative solutions such as an e-motor to power electric vehicles. Nidec’s business model revolves around creating global presence while capitalizing on synergies across their portfolio companies.
Nidec’s acquisition strategy centers around companies that bring an array of products, technologies and customer groups – giving it a competitive advantage in each of the markets it operates in. Furthermore, these acquired companies must be financially sound with strong management teams.
Nidec acquires new companies with diverse business models that allow it to leverage their expertise for improved offerings within its own offerings. This creates sales synergy while simultaneously cutting costs by using existing resources from acquired firms.
Our mission at the company is to be one of the world’s premier conglomerates that specialize in motors and drives for diverse applications and industries, as evidenced by aggressive sales targets for each division and segment-level details that help investors understand how we plan to reach our objectives.
Nidec Global Appliance, the division of Nidec that manufactures AC motors for refrigerators and air conditioning systems, has been striving to increase energy efficiency within their products. To meet this objective, they require rapid product design and testing capabilities while meeting all local regulations in their designs.
But their legacy CAD system was unconnected to other product development processes and this led to high first-pass yield failure rates, customer returns, and rework. They recognized they needed to change their culture by adopting digital platforms as part of the solution.
PTC Windchill, a cloud-based PLM solution, allowed them to manage all their product data effectively and seamlessly across multiple systems, creating one version of truth, and speeding up delivery processes. Today they rely on Windchill’s robust management process for driving their business with trusted data.
3. Nidec’s Strategy to Become a Leader in Electric Vehicles
Nidec plans on investing up to $10 billion to become the market leader for electric vehicle (EV) motors by 2025 and reaching 45 percent by 2030, according to sources familiar with its plans. It currently occupies approximately one quarter of global EV motor sales market share according to sources familiar with this matter.
Nidec plans to invest in the creation of integrated EV powertrain systems known as e-axles – these integrated units integrate motors, gears and power electronics – in a single unit and aim to improve energy efficiency and compactness while decreasing costs and driving demand for electric vehicles. Nidec plans on offering such products for under $1,000 within several years in order to significantly lower costs while increasing demand.
To reach their goals, the Japanese company will partner with several organizations. CATL, an Asian battery maker, has already signed an agreement to collaborate on developing high-efficiency traction drives for buses, trucks and trailers as well as developing an energy-efficient inverter that will lower total cost of ownership.
Foxconn Technology Group is one of Nidec’s key partners and will assist with global sales and engineering efforts as well as production capacity to help meet growing demand for EV components.
Nidec is investing heavily in the small EV segment where they believe there is significant growth potential, opening a factory in Serbia where they will produce motors and key components for electric cars. Their Novi Sad factory employs 200 people over 36,000 square meters. Nidec COO Jun Seki explained why Serbia was chosen because local governments provide “tremendous support,” making it easy to recruit engineers.
Nidec is confident it can outshout Tesla when it comes to designing superior and more cost-effective key EV components. Seki pointed out that small EVs such as China’s Mini EV are selling like hotcakes. Furthermore, Nidec stands ready to meet this strong demand for very compact motors; in particular this segment’s motor demand has been strong in Nidec. In time he believes electric vehicles will replace gasoline-powered ones entirely.
4. Nidec’s Strategy to Become a Leader in Industrial Motors
Nidec Corporation will capitalize on its leading technology to deliver solutions that make an impactful statement about how technology can change lives for the better. From refrigeration and pumps to motors, its innovations enable customers to save energy, reduce operating costs and meet stringent environmental regulations more easily while Nidec’s intelligent systems help enhance product quality and productivity.
Embraco solutions feature variable speed compressors that have been shown to reduce energy consumption by 35% while meeting stringent energy efficiency regulations worldwide. Their smart pumping system also enables users to remotely monitor and optimize performance from anywhere around the world – these innovations not only contribute to an improved quality of life but also help mitigate drought conditions by decreasing global water usage.
Additionally, the company intends to increase their presence across Europe with the construction of a new factory in Novi Sad, featuring an electric motor plant capable of producing up to 100,000 units annually in addition to inverters and control systems. Once completed, this site will cover an area of nearly 60,000m2.
Nidec’s investment in Europe is part of its plan to dominate the EV motors market and achieve 25-35% global market dominance by 2025 and 40-45% by 2030. Over five years, they are spending 10 billion USD.
Nidec plans to use its experience and know-how to create highly efficient motors that enable vehicles to reach price parity with combustion engines or hybrids, as well as developing solutions enabling the use of high-voltage DC motors for use in heavier equipment or electric cars.
Nidec will benefit greatly from developing these and other technologies, which will enable it to adapt its business strategy more rapidly to customer demands and address major global issues like never before. Investors appear to recognize Nidec’s efforts – multiple investors participated in our Investor Guidance Preferences Study noted it as an example of a company effectively communicating long-term goals and priorities to shareholders.
