Nidec Corporation Business Report FY ended Mar. 2020

Financial Overview

(in millions of JPY)
FY ended
Mar. 31,
2020
FY ended Mar. 31, 2019 Rate of Change
(%)
Factors
Overall
Sales 1,534,800 1,475,436 4.0 -Achieved record-breaking sales.
Operating income 110,326 129,222 (14.6) -Additional expenses incurred for initial start-up costs for development and production launch of tractions motors, which saw huge growth in demand; along with higher one-time costs for acquisitions
Current net income before income taxes 106,927 129,830 (17.6) -
Current net income attributable to the Company's stockholders 60,084 109,960 (45.4) -
Nidec
Sales 183,036 215,685 (15.1)

-Lower sales of HDD motors and small-size motors

Operating income 4,254 19,400 (78.1) -Lower sales volumes and increased costs for the E-Axle business
Nidec Sankyo
Sales 139,173 153,935 (9.6)
Operating income 8,197 13,739 (40.3)
Nidec Motors & Actuators 
Sales 301,792 306,334 (1.5)
Operating income 31,975 34,832 (8.2)

 

Business Acquisitions

<Japan>
-The Company announced that the board of directors has decided to conduct a share exchange to make Nidec Elesys Corporation a wholly owned subsidiary and concluded the share exchange agreement. By making Nidec Elesys a wholly owned subsidiary, it will maximize the firm’s value as a group by promoting developments in the traction motor business, which is the most important strategic product of the group. (From a press release dated December 7, 2019)

-The Company announced on April 16 that OMRON Automotive Electronics Co., Ltd., an OMRON group automotive electronics parts maker (Komaki City, Aichi Prefecture), will become its subsidiary around October 2019. Nidec intends to actively develop sensors that support autonomous driving, in cooperation with the new subsidiary. (From an article in the Nikkan Jidosha Shimbun on April 17, 2019)
  
 

Outlook for FY ending March 2021 

(in millions of JPY)
  FY ended Mar. 31, 2021
(Forecast)
FY ended Mar. 31, 2020
(Actual Results)
Rate of Change
(%)
Sales 1,500,000 1,534,800 (2.3)
Operating income 125,000 110,326 (13.3)
Current net income before income taxes 125,000 106,927 16.9
Current net income attributable to the Company's stockholders 100,000 60,084 66.4

 

R&D Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2020 FY ended Mar. 31, 2019 FY ended Mar. 31, 2018
Overall 78,630 62,912 55,438
-Nidec 34,125 25,439 20,829
-Nidec Sankyo 5,498 5,610 5,509
-Nidec Motors & Actuators 10,180 9,113 7,959

 
 

R&D Structure

-Nidec Research and Development Center in Japan, and Nidec Research and Development Center in Taiwan conduct research on basic technologies related to motors in general that are expected to become a core part of the Company's global R&D strategy.

<Nidec Corporation>
-Shiga Technical Center: R&D activities on all sorts of automotive drive motors to develop new products, mass-produce new models, and improve quality such as motors for electric vehicles.
 

R&D Activities

<Nidec Corporation>

-The following were new-product-development proposals:

  • Development of drive motors for electric vehicles, mainly for OEMs in China
  • Development of compact, high-performance, next-generation power-steering motors and motors for applications other than power-steering (seats, brakes, sunroofs), and auxiliary ECUs
  • Development of brushless motors used in duel-clutch transmissions and in electric, hydraulic systems
  • Development of packages in which drive motors for electric vehicles and in-vehicle motors are combined with sensors and control devices

<Nidec Motors & Actuators>

-Automotive motors: Conducting R&D activities mainly in Germany, Poland, Spain, and Japan in order to increase the life of automotive motors and make them smaller and more light weight

  • R&D activities on making compact, brushless motors that don’t use rare-earth metals, for use on seat adjusting, steering-column adjusting, and sunroofs
  • Development of light-weight brushless motors for use in engine cooling

-Chassis control (brakes, steering systems):

  • Brakes: Development, commercialization, and mass-production of brush motors for ECUs used in regenerative braking systems, brushless DC motors, and ECSs for lateral slide-prevention systems
  • Electric power-steering: Completed development of ECUs for brush and brushless motors and conducting advanced R&D activities on ECUs for brushless motors, in response to the need for functional safety

ーAdvanced-safety segment:

  • Conducting activities on R&D, commercialization, and mass-production of cameras, millimeter wave radar, etc.

-Other R&D activities:

  • High-function and high-performance control-valve assemblies for automatic transmissions, duel-clutch transmissions (DCTs), continuously variable transmissions (CVTs)
  • Electric oil pumps
  • Electric hydraulic actuators for transmissions
  • Traction motors and traction-motor systems, i.e., E-Axles for OEMs and Tier 1 manufacturers of electric vehicles and plug-in-hybrid vehicles

<Nidec Sankyo>

  • Stepper motors: R&D activities to make stepper motors more compact, higher performance, and more cost effective, to further increase applications for automobiles.
  • Development of touch-pad devices for onboard automotive applications
  • Motor drive-units: Automotive thermal-management systems that satisfy the demand for cooling/heating solutions needed in line with electrification


Development of thermal management system with Sanden Holdings
-Sanden Holdings Corporation (Sanden HD) announced that it has started joint research and development of a thermal management system for electric vehicles (EVs) with Nidec Corporation. The system aims to extend the mileage of EVs with an integrated thermal management of exhaust heat from the motor and the air conditioning system. EVs are expected to be popular in the future, but their cruise distance is significantly affected by the use of electronic components such as air conditioning systems. To address this problem, the two companies will combine Sanden HD’s expertise accumulated in the air conditioner development and Nidec’s know-how on traction motors and inverters to accelerate the development of an integrated thermal management system of air conditioners and driver units for electrified vehicles. The new system is planned to be commercialized in 2022.  (From an article in the Nikkan Jidosha Shimbun on November 5, 2019)

R&D activities with Waterloo University on radio-wave sensors
-Nidec Mobility Corporation, a subsidiary of Nidec, and University of Waterloo in Canada have started collaboration on the development of technology for improving the performance of in-vehicle radar sensors for detection of unattended children or animals. With the frequent occurrence of fatal accidents involving infants left behind in hot vehicles, the countries and institutions are pursuing countermeasures; the EURO NCAP has announced the beginning of awarding rating points for child presence detection, and the HOT CAR act is under consideration to mandate the installation of alarm devices. In March 2019, Nidec Mobility entered into a joint development agreement with the University of Waterloo, which excels in the field of sensing, with the aim of developing technology necessary for improving the performance of in-vehicle radar sensors. Nidec Mobility intends to begin mass-production of a radar sensor which utilizes advanced antenna technology and phantom technology in 2022, in time for the implementation of the EURO NCAP and the HOT CARS Act. (From a press release dated December 24, 2019)

Product Development

E-Axle
-Currently, the Company doesn’t deliver any drive motors or E-Axles in Japan. However, with the business in China growing, the following is the full line-up of E-Axles:
   Peak output 150 kW: Diesel-engines for mass-marketed passenger cars built by Guangzhou Automobile Group Co., Ltd.
   Peak output 100 kW: B/C passenger cars that started to be built in 2020
   Peak output 70 kW: A/B passengers cars planned to be built in 2021
   Peak output 50 kW: Compact/A passenger cars planned to be built in 2022
   Peak output 200 kW: Diesel-engine passengers cars planned to be built in 2023
-The Company is winning business through delivering low-cost products never seen before based on standardizing products and raising the percentage of in-house production. According to the company, it predicts it will receive orders for more than 10 million units between October and December 2019. Based on this, the Company is enhancing its production operations in three places worldwide by investing JPY 200 billion, planning to achieve an annual production capacity of 10 million units. The company plans to increase its total sales volume to JPY 5 trillion by 2025 (three times the current amount). However, it needs to make large investments in order to keep up with making E-Axles one of its core products.

In-wheel Motors for Electric Vehicles
-The Company has developed an in-wheel motor prototype for electric vehicles (EVs). The in-wheel motor prototype has a power output of 100 kW, which is equivalent to the output of a 1.8-liter gasoline engine, and is compatible with all driving systems. Nidec plans to start mass production in 2023. The company has developed the in-wheel motor prototype by applying the technology of its E-Axle traction motor system that will be mass produced in May. The prototype, which consists of a motor and integrated reduction gears, is 32 kg in weight and is compact enough to fit inside a 20 inch wheel. (From an article in the Nikkan Jidosha Shimbun on March 8, 2019)

Self-driving Radar/Electric-vehicle Platform Business
-The Company will accelerate moves to develop new products for vehicle electrification and autonomous driving, which are part of CASE (Connectivity, Autonomous, Sharing and Electrification), a guiding principle for the future of the auto industry. For electrified vehicles, the company expanded the lineup of the E-Axle, which integrates a motor, a gearbox and an inverter. For autonomous vehicles, Nidec has developed a radar making use of a new antenna technology. The company will speed up the development of new products for next-generation vehicles, aiming to achieve its annual sales target of JPY 600 billion for the fiscal year 2020 that ends in March 2021. Nidec’s E-Axle with a maximum output of 150 kW will be installed on the all-new Aion S electric vehicle of GAC New Energy Automobile Co., Ltd. of China, with production starting in Zhejiang Province, on April 15. Nidec says it has received inquiries for the E-Axle from other emerging Chinese EV manufacturers and tier-1 suppliers in Europe. In addition, the company will launch an EV platform business around 2025 harnessing its electric power steering (EPS) technology and brake system technology. The new radar for autonomous vehicles will cover both mid-range and short-range. The frequency is switched automatically depending on the vehicle speed. (From an article in the Nikkan Jidosha Shimbun on April 16, 2019)

 

Capital Expenditure

(in millions of JPY)
  FY ended Mar. 31, 2020 FY ended Mar. 31, 2019 FY ended Mar. 31, 2018
Overall 132,926 120,555 90,841
-Nidec 3,032 1,875 75
-Nidec Sankyo 7,643 8,803 9,303
-Nidec Motors & Actuators 48,809 37,310 22,515

  

Investment in Japan

-The Company announced that it will establish a new business base adjacent to its head office in Kyoto City. The new base will have consolidated functions as the second head office and research and development bases of Nidec subsidiaries. A total of four new buildings will be constructed from 2022 to 2030, with an investment of approximately JPY 200 billion. This move is to reinforce the cooperation among Nidec Group members. The combined total of the workers at the new site and the existing head office is expected to reach 5,000. The new 60,000-square-meter site will be located in Morimotocho, Muko City, Kyoto, between the head office and JR Mukomachi Station in Muko City. The site will be home to the second head office building and three buildings for R&D, with a total floor space of about 1,547,000 square meters. The first phase to build the new R&D base of Nidec-Shimpo Corporation and the new head office of Nidec-Read Corporation is scheduled for completion in March 2022. The second phase is planned for finalization between 2025 and 2026, and the third phase to build Nidec’s second head office is scheduled for completion in 2030. (From an article in the Nikkan Jidosha Shimbun on January 10, 2019)

 

Investment outside Japan

<China> 
-Guangzhou Automobile Group Co., Ltd. (GAG) held the 22nd meeting of its Fifth Board of Directors and approved a resolution about the project of an integrated electric drive system for new electric vehicles (NEVs). According to the resolution, GAG approved the construction of the aforementioned project by a joint venture tentatively named Guangzhou Nidec Automobile Drive System Co., Ltd. The joint venture is to be established by GAC Component Co., Ltd. (GAC Component), a GAG’s wholly-owned subsidiary, and Nidec Corporation. The planned project investment is totaled about CNY 1,050,530,000, of which shareholders will contribute CNY 600 million and GAC Component will contribute CNY 294 million based on a 49% share in the joint venture. Additionally, the meeting also examined and approved a resolution about the project of land acquisition and construction for an intelligent NEV industrial park. With GAG’s approval, GAC Component will implement the aforementioned project, which has a planned investment totaling CNY 624.18 million. (From a press release on August 1, 2019)

 

Planned Capital Investments

(As of Mar. 31, 2020)
Name Location Type of facility and activities Planned investing amount
(in millions of JPY)
Start Finish
Nidec Corporation Kyoto, Japan Consolidation of headquarters No 2 and Group companies 200,000 2020 2030
NIDEC MOTORS & ACTUATORS (POLAND), Sp. z o.o Poland
Niepołomice
Facilities for manufacturing automotive products 13,191 Apr. 2020 Mar. 2021