Nidec Corporation Business Report FY ended Mar. 2015
|(in millions of JPY)|
|FY ended Mar. 31, 2015||FY ended Mar. 31, 2014||Rate of Change
|Sales||1,028,385||875,109||17.5||-Sales, operating profit, profit before taxes, and net profit all set new record highs.
-For the first time, sales nearly reached JPY 1 trillion and operating profit surpassed JPY 100 billion.
-Sales at the "automotive, electric-appliance, commercial, and industrial equipment/devices business", which plays a role in changing the Company's business portfolio, surpassed those of the "small precision motors business" for the first time ever.
|Profit before tax||107,371||84,460||27.1|
|Profit for the year attributable to owners||76,216||56,272||35.4|
|Sales||28,954||27,599||4.9||-Favorable currency translation from US dollars, Thai baht, and euros to weak Japanese yen helped increase sales.
-Demand for HDD motors, DC motors, fan motors, and EPS motors increased.
|Sales||122,711||98,564||24.5||-Addition of the business results of Nidec Sankyo CMI Group, a new consolidated subsidiary, increased sales.
-Higher sales of DC motors and card-readers
-Favorable currency translation from US dollars to Japanese yen.
|Sales||200,040||171,879||16.4||-Increase in new orders
-Favorable currency translation from US dollars to weak Japanese yen
|Nidec Motors & Actuators|
|Sales||172,699||105,249||64.1||-Addition of business results from Nidec Elesys Corporation, a new consolidated subsidiary.
-Launch of production for new models.
-Changes were made to business segments in the fiscal year that ended in March 2015. Nidec Tosoku and Nidec Elesys were included in the results of Nidec Motors & Actuators.
Acquisition of automotive-pump maker based in Germany
-On December 11, 2014, the Company signed a Stockholding Acquisition Agreement with Geraete-und Pumpenbau GmbH Dr. Eugen Schmidt (GPM), located in the Free State of Thuringia, Germany. According to the Agreement, Nidec is to acquire 100% of the shares owned by the company's founder. Based on the agreement, on February 2, 2015, all the shares were acquired through an arrangement by Nidec Motors & Actuators (Germany) GmbH. GPM adopted a new name, Nidec GPM GmbH. Nidec assigned its vice president, Bunsei Kure; and an executive director, Kazuya Hayafune, as part-time executive officers of Nidec GPM.
-GPM, which exclusively produces automotive pumps, has the highest market share of automotive pumps in Europe. It develops, manufactures, and sells water pumps, oil pumps, and modular pumps for passenger cars and commercial vehicles. It has production facilities in Merbelsrod located in the Free State of Thuringia, Germany; in Indaiatuba, located in the state of Sao Paulo, Brazil; and in Suzhou located in Suzhou Province, China. It has 1,000 employees and its sales were EUR 265.9 million in the fiscal year that ended in December 2013.
-The acquisition was made in order to expand operations in the automotive-product sector by combining operations. Demand is expected to grow for motor-driven electric oil pumps and electric water pumps in line with the growth of stop-and-start engine systems, hybrid vehicles, and all-electric vehicles.
New CVT control valve plant in Mexico
-Nidec Tosok Corporation has established a new subsidiary, Nidec Tosok de Mexico, S.A. de C.V., for manufacturing control valves for automatic transmissions in the state of San Luis Potosi, Mexico. The new subsidiary is capitalized at JPY 1.6 billion, all of which was financed by Nidec Tosok. The Company plans to invest JPY 4.5 billion and hire 800 employees for the phase 1 of the three-phase construction plan. The subsidiary's plant will begin operations in May 2015. Both the investment amount and the number of employees will be increased in stages. By the end of the phase three, the company plans to increase the investment amount to a total of JPY 15 billion and the number of employees to 3,000, respectively.
-The Company expects that demand for control valves will grow significantly in Mexico, where its customers are stepping up local production of continuously variable transmissions (CVTs). These customers include Jatco Ltd., the Company's major customer, and Honda Motor, which will begin making CVTs in Mexico in the second half of 2015. CVTs made at Honda's Mexican facility will be mounted on the Fit, which will be the first Honda model that uses Nidec Tosok's products. Currently, control valve assemblies for the Mexican market are made at Nidec Tosok (Vietnam) and are delivered to each CVT plant via customers' Asian facilities. Nidec Tosok hopes to meet the needs of both existing and new potential customers in Mexico by supplying its products directly from its planned new factory. (From an article in the Nikkan Jidosha Shimbun on April 24, 2014)
New mid-term strategic objectives for FY 2020
-Constant pursuit of high growth to sustain profits:
- Consolidated sales target: JPY 2 trillion (includes JPY 500.0 billion based on new M&As)
- Automotive sales alone: JPY 700 billion – 1 trillion
- Consolidated profit margin target: 15% or higher
- ROE (return on equity): 18% or higher (based on target of 60% shareholders' equity ratio)
- 5-region based operations: Japan, China, Asia, the Americas, and EMEA (Europe, Middle East, and Africa)
Strategic objectives under the automotive business' new mid-term plan:
-In responding to globalization of Tier 1 suppliers, electrification, and the concept of "local production for local consumption", the Company is working to increase sales of proprietary products based on electrification, modularization, and in-house production.
The Company will accelerate modularization of its automotive parts, centering on its core motor technologies, in an effort to increase its global market share in the automotive parts market. Nidec will release an ultra-compact power pack that incorporates an electronic control unit (ECU) and a motor for an electronic power steering (EPS) system. The Company aims to increase its global market share in the EPS market to 50% by the fiscal year ending in March 2021 (FY 2020). The Company also intends to increase its global market shares in the electric oil pump and electric water pump markets to 30% and 20% respectively, by FY 2020. Nidec is increasingly receiving orders for its automotive parts thanks to the recent trends for electrification of vehicles and the standardization of components. Nidec will actively make investments to increase in-house production of its parts and improve profitability in line with expansion of its business. (From an article in the Nikkan Jidosha Shimbun on May 1, 2015)
-Estimated market scale and targeted global market share of automotive products in 2020:
- Electric power steering motors: 70 million units/50% share
- Electric dual-clutch motors: 10 million units/70% share
- Electric oil pumps: 11 million units/30% share
- Electric water pumps: 34 million units/20% share
- Electric power steering power-packs (Nidec motor with Nidec Elesys ECU)
- Electric oil pump power-pack (Nidec motor, Nidec Elesys invertor, Nidec Tosoku/Nidec GPM pump and case)
-In-house production of following operations: stamping, plastic-molding, die-casting, shaft machining, housing machining.
-ADAS market is forecast to grown to 20 million units.
The Company will start mass-producing its front-view monocular camera integrated with millimeter-wave radar in 2017. The product will be used for Advanced Driver Assistance Systems (ADASs) such as an automatic braking system. Nidec announced its plan to improve the competitiveness of its sensors for ADASs and acquired the former Honda Elesys Co., Ltd. (currently named Nidec Elesys Corporation) in March 2014. Nidec is expecting to receive orders for the product from European, Chinese and South Korean automakers as well as four Japanese automakers. Nidec hopes that sales from these automakers will increase its market share in each market. The company aims to achieve a 20% share in the global market of sensors used in ADASs by 2020. (From an article in the Nikkan Jidosha Shimbun on November 21, 2014)
-Globalization: Respond to winning orders for mega platforms, based on the concept of local production/local consumption by OEMs and Tier 1 suppliers.
- Nidec: Launch of operations in July 2015 at production plant in India
- Nidec Tosoku: Launch of operations in May 2015 at production plant in Mexico
- Nidec GPM (acquired in Feb. 2015): production plants in Germany, Brazil, and Suzhou, China
Outlook for FY ending March 2016
|(in millions of JPY)|
|FY ended Mar. 31, 2016
|FY ended Mar. 31, 2015
|Rate of Change
|Profit before tax||126,000||107,371||17.4|
|Profit for the year attributable to owners||90,000||76,216||18.1|
|(in millions of JPY)|
|FY ended Mar. 31, 2015||FY ended Mar. 31, 2014||FY ended Mar. 31, 2013|
|-Nidec Motors & Actuators||5,201||1,491||1,118|
*Since FY ended March 2015, the Nidec Tosok group has been included in the Nidec Motors & Actuators segment.
-Companywide, R&D expenses are forecast to be JPY 52,000 million in the fiscal year ending March 2016.
-Nidec Research and Development Center in Japan, Nidec Research and Development Center in Singapore, 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.
-In July 2014, the Company has unveiled a new building of its Research and Development Center to its business partners and the press. The new building was completed in Kawasaki, Japan, with an investment of JPY 20 billion. According to President Shigenobu Nagamori, the Company will reinforce its research facilities and hire more researchers to accelerate researches on fundamental technologies that directly lead to the creation of new businesses. In order to increase competitiveness, the Company will first tackle with challenges common to Nidec group companies such as making compact and lightweight products. Nidec will expand its main businesses including automotive parts by strengthening its fundamental technologies. (From an article in the Nikkan Jidosha Shimbun on July 12, 2014)
-Shiga Technical Center engages in research and development activities aimed at new product development, mass production of new models, and improvement of product quality related to small precision DC motors and fan motors, excluding those used for HDDs.
-Nidec's technical development center in Dalian, China is capable of performing reliability testing and product assessment of brushless and brush motors. The facility is expected to serve the needs of Chinese OEMs and Tier 1 suppliers in an efficient manner.
-Nidec Corporation is strengthening its development of new products targeting emerging markets such as China, India and Brazil as well as developed markets.
-The Company is developing next-generation of;
- small and high-performance power steering motors,
- motors for applications other than power steering such as seats, brakes and sunroofs, and ancillary electronic control units (ECUs),
- brushless motors used for hydraulic and electric power systems
- package products that combine motors with sensors and control units
<Nidec Motors & Actuators>
-Automotive motors: R&D activities in Germany, Spain, and Japan on motors, to increase product life and make them smaller and lighter.
- Seat and sunroof motors: commercialization of compact, brush motor not requiring rare-earth metals
- Engine cooling motors: development of compact and light brush fan motors
-Chassis control: (brakes and steering system):
- Brakes: Commercialization (development/production) of ECU for regenerative braking system, and ECU for electronic stability control systems.
- Electric power steering system: Developed ECU for both brush and brushless motors. Conducting advanced development of ECU for brushless motors designed to provide functional safety
-Advanced safety: cameras, millimeter radio waves:
- Cameras: Developed ECU for monocular camera
-Other R&D activities:
- Highly functional/high-performance control-valve assembly for automatic transmissions and constant-variable transmissions
- Electric oil pumps
- Electric hydraulic actuator for transmissions
-With respect to stepping motors, in an effort to expand the range of their applications to automobiles, Nidec Sankyo has been downsizing products, enhancing product performance and improving cost-performance.
-With respect to vehicle driving motors, Nidec Motor engages in modularization of motors with encoders based upon its rare earth-free SR motor technology, and in development activities aimed at hybridization and electrification of large-sized vehicles such as construction and agricultural machinery.
-In November 2014, the Company has developed a new motor drive system which controls a magnet-less switched reluctance (SR) motor using a Silicon Carbide (SiC) power semiconductor inverter. The volume and weight of the new motor drive system are 32% and 69% of the conventional motor drive system. The new motor drive system reduces power losses of the inverter. The company intends to develop an integrated motor drive system (in which the inverter is installed inside the motor housing) by the end of 2015 and propose it as a drive motor for electric vehicles in 2020. (From an article in the Nikkan Jidosha Shimbun on November 18, 2014)
-This company is engaged in developing products and elemental technology on system devices such as automotive lenses, automotive motors, etc. at the Tokyo R&D Center.
- Optical products: Switch from developing products for digital cameras, to products for automotive lenses and mobiles.
- Motors: Switch from developing products for digital cameras, to products for mobiles, vehicles, and motorcycle.
-Nidec Copal Corporation plans to step up the development of automotive lenses.
|(in millions of JPY)|
|FY ended Mar. 31, 2015||FY ended Mar. 31, 2014|
|-Nidec Motors & Actuators||13,797||12,769|
-Companywide, investments are forecast to be JPY 72,000 million in the fiscal year ending March 2016.
Planned Capital Investments
|(As of Mar. 31, 2015)|
|Name||Location||Type of facility and activities||Planned investing amount
(in millions of JPY)
|Nidec Tosok de Mexico S.A. de C.V.||San Luis Potosi,
|Facilities to produce automotive components||4,500||Jul. 2014||May 2015|