Nidec Corporation Business Report FY ended Mar. 2016

Financial Overview

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 Rate of Change
Sales 1,178,290 1,028,385 14.6 -Sales broke all previous records, driven by the fourth consecutive quarterly increase.
-Operating profit, current net income before income taxes, and current net income attributable to the Company's stockholders broke all previous records. Each posted increases for the third consecutive quarter.
-The fourth-quarter profit margin for automotive, home-appliance, commercial, and industrial products in the fiscal year that ended in March 2016 was 10.4%, which is the first time ever that the profit margin exceeded 10% for any one quarter.
Operating income 124,538 110,939 12.3
Current net income before income taxes 119,328 107,092 11.4
Current net income attributable to the Company's stockholders 91,810 76,015 20.8
Sales 31,384 28,954 8.4 -Greater demand for electric-power-steering motors and dual-clutch-transmission motors.
-Favorable currency translation due to the weak yen against the US dollar.
Operating income 18,031 14,083 28.0
Nidec Sankyo
Sales 129,068 122,711 5.2 -Even though sales of DC motors decreased, sales of robots for transporting liquid crystal glass panels and sales of card readers increased.
-Favorable currency translation due to the weak yen against the US dollar.
Operating income 15,052 12,686 18.7
Nidec Motor
Sales 224,786 200,040 12.4 -Increase in new business orders
-Favorable currency translation due to the weak yen against the US dollar.
Operating income 16,674 11,690 42.6
Nidec Motors & Actuators
Sales 247,662 172,699 43.4 -Results from acquiring Nidec GPM in February 2015.
-Greater demand for motors such as those for electric-power-steering systems
-Greater demand for Nidec Elesys’ ADAS products.
-Favorable currency translation due to the weak yen against the US dollar and Chinese yuan.
Operating income 25,368 18,614 36.3

-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.

Business Acquisitions

-In Sep. 2015, the Company announced that its subsidiary, Nidec Sankyo Corporation, has signed an agreement to acquire a 100% stake in PT. Nagata Opto Indonesia, which manufactures glass lenses for in-vehicle cameras. The acquisition is expected to be completed in the middle of September 2015. Established in 2009, Nagata Opto Indonesia is headquartered in Bogor, Indonesia and has particular strength in the area of glass lens processing. Sales reached USD 3.93 million in 2014 and the number of employees was 306 as of the end of June 2015. (From an article in the Nikkan Jidosha Shimbun on July 25, 2015)

-The Company announced that its subsidiary, Nidec Motor (Qingdao) Corporation (NMQC), has completed the acquisition of the switched reluctance (SR) motor and drive business of China Tex Mechanical & Electrical Engineering Ltd. (China Tex MEE) on July 31, 2015. Prior to this acquisition, NMQC had established a new company called Nidec (Beijing) Drive Technologies Co., Ltd. in Beijing, which assumed the SR motor and drive business. The new company has facilities in Beijing and Zibo (Shandong Province). With a workforce of 88 employees, the company is engaged in developing, producing, and selling SR motors and drives. (From a press release on August 3, 2015)

-In Feb. 2015, the Company has completed the acquisition of all of the shares in Gerate- und Pumpenbau GmbH Dr. Eugen Schmidt (GPM) from its shareholders. GPM is a leading automotive pump supplier that has a high market share in Europe. GPM has become a consolidated subsidiary of Nidec and is accordingly renamed Nidec GPM GmbH. The new subsidiary is headquartered in Thuringia, Germany. Bunsei Kure (Nidec's Executive Vice President) and Kazuya Hayafune (Nidec's First Senior Vice President) were assigned as the part-time Directors at Nidec GPM. Nidec anticipates further expansion in demand for electric oil pumps and electric water pumps both of which are driven by electric motors, as hybrid vehicles, electric vehicles and vehicles with start-stop systems are becoming increasingly popular. (From an article in the Nikkan Jidosha Shimbun on February 16, 2015)

Growth strategy

-In Jun. 2016, the Company said that advancing automotive electrification and autonomous driving technologies will drive the growth of the Company, and expressed confidence that the Company will continue to grow through expansion of businesses it has strength in like motors and sensors. It also announced that the Company has received large orders for electric brake motors from a major global parts supplier, and will start delivery in 2018. About the sale of Nissan Motor Co., Ltd.'s stake in Calsonic Kansei Corporation, it said, "We would like to acquire certain Calsonic Kansei businesses. They make up about JPY 300 billion in sales of a total of JPY 1 trillion. If investment funds or other organizations purchase the shares and sell the particular businesses we're interested in, we will apply to purchase them." (From an article in the Nikkan Jidosha Shimbun on June 21, 2016)

-In Jan. 2016, the Company announced that, "We will be making our form of enterprise closer to that of Bosch, Continental and Denso," naming Japanese and German mega-suppliers, as it indicated an objective to strengthen in automotive related areas. It cited autonomous driving, human machine interface (HMI), electric vehicles and plug-in hybrids as the areas that the Company sees opportunity for business through technical innovation. (From an article in the Nikkan Jidosha Shimbun on January 23, 2016)

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. The Company 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. The Company 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)

-Expanded powertrain business:

  • Shifting from hydraulics to electrification. Aiming to launch powertrain business.
  • Example: SR motor with built in SiC inverter, which is smaller, lighter, and more energy efficient than existing ones.

-Received orders for components used in the drive systems for low-speed electric vehicles (LSEVs) in China

  • Motor, Gear box, Controller, Battery charger
  • Focus on products for automobiles in China, and tri-wheel vehicles in India and Southeast Asia

-In-house production of following operations: stamping, plastic-molding, die-casting, shaft machining, housing machining.

-Expanding the use of LiDAR (Laser imaging Detection & Ranging) in the automotive sector (autonomous driving, etc.)

-Foresees achieving 2020 sales target for ADAS products two years ahead of plan:
The Company held a financial results briefing for the first quarter of the fiscal year to end in March 2016 in Tokyo. During the briefing, it said that its subsidiary, Nidec Elesys Corporation, will probably achieve sales of JPY 100 billion two years ahead of the target year 2020. Nidec Elesys substantially exceeded its targets in the first quarter and has rapidly improved its profitability. One reason for the company’s improved results is the performance of its advanced driver assistance system (ADAS) business. The Company expects further growth in the ADAS business, saying that the lead time for ADASs, from order intake to mounting, is shorter than that for electric power steering systems. Thus, the Company believes that ADASs will contribute an increasing percentage of sales and profits for the Company’s automotive business. (From an article in the Nikkan Jidosha Shimbun on July 28, 2015)

-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 2017

(in millions of JPY)
FY ended Mar. 31, 2017
FY ended Mar. 31, 2016
(Actual Results)
Rate of Change
Sales 1,250,000 1,178,290 6.1
Operating income 130,000 124,538 4.4
Current net income before income taxes 130,000 119,328 8.9
Current net income attributable to the Company's stockholders 98,000 91,810 6.7

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditure

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 51,978 45,179 37,808
-Nidec 22,523 17,982 19,896
-Nidec Sankyo 4,689 5,384 3,919
-Nidec Tosok* - - 831
-Nidec Motor 6,020 5,411 4,689
-Nidec Motors & Actuators 7,336 5,201 1,491

*Since FY ended March 2015, the Nidec Tosok group has been included in the Nidec Motors & Actuators segment.

-Overall, R&D expenses are forecasted to be JPY 55,000 million in the fiscal year ending March 2017. (US GAAP)

R&D Structure

-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.

-The Company announced that it will construct a new building for "Nidec Institute for Industrial Science." The new building will be established in Keihanna Science City, Kyoto, Japan. With a land area of approximately 27,000 square meters, the four-story building will have a floor area of approximately 37,000 square meters. The Company plans to invest approximately JPY 20 billion in land, a building, and equipment. Construction is scheduled to start in October 2016 and to be completed by December 2017. The new facility will serve as home to engineers from Nidec's group companies which are engaged in manufacturing technologies and advanced development, and will recruit researchers outside the group including foreign researchers. There are expected to be approximately 1,000 employees in the future. (From an article in the Nikkan Jidosha Shimbun on January 12, 2016)

-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.

R&D Activities

-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

-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: Combining technologies of group companies in optimal manner.
  • 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 traction 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.

-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 medical.

Product Development

Haptic technology
-The Company received the first order for an actuator that alerts drowsy driving. The electric parts makers intend to step up sales operations highlighting their haptic products' safety feature, including the possibility of using as a means of communication with the driver. (From an article in the Nikkan Jidosha Shimbun on December 4, 2015)

Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 81,918 58,042 40,297
-Nidec 735 140 232
-Nidec Sankyo 7,949 5,790 3,712
-Nidec Motor 9,321 4,475 3,817
-Nidec Motors & Actuators 17,637 13,797 12,769

-Overall, capital expensiture is forecasted to be JPY 110,000 million in the fiscal year ending March 2017.

Planned Capital Investments

(As of Mar. 31, 2016)
Name Location Type of facility and activities Planned investing amount
(in millions of JPY)
Start Finish
Nidec Institute for Industrial Science
Kyoto, Japan Facilities for researching elemental and applied technologies 20,000 Dec. 2016 Jan. 2018
Headquarter ANNEX global training center
Kyoto, Japan Employee training center 4,300 Jan. 2016 Mar. 2017
Nidec Copal Corporation Tokyo, Japan Electronic and optical components, Facilities to manufacture equipment devices 6,214 Apr. 2016 Mar. 2017
Nidec Automobile Motor
(Zhejiang) Corporation
Zhejiang, China Facilities to manufacture automotive products 5,861 Apr. 2016 Mar. 2017
Nidec Motors & Actuators (Germany) GmbH Baden-Württemberg,
Facilities to manufacture automotive products 4,494 Apr. 2016 Mar. 2017