NIDEC CORPORATION (6594) Stock Price

Nidec is a company that designs, manufactures, and sells precision small motors as its core business, along with automotive products, appliances, commercial and industrial equipment, machine tools, and electronic and optical components. Leveraging its advanced small motor technology, the company handles a wide range of offerings—from individual components to finished products incorporating motors and control systems.

The company's primary customers include automotive manufacturers, appliance and industrial equipment makers, and electronic equipment manufacturers. It generates revenue through the supply of mass-production components and system proposals. Nidec builds a stable revenue base by diversifying across multiple business segments and establishing long-term supply relationships and collaborations with customers.

The business comprises six reportable segments: precision small motors, automotive products, appliances/commercial and industrial products, machinery (machine tools and equipment), electronic and optical components, and group company operations. Beyond motors alone, Nidec maintains a product lineup spanning modules, control equipment, and machine tools, serving customer needs through production facilities and sales networks worldwide.

The company has announced a new medium-term plan called "Conversion2027" targeting fiscal year 2027, with goals of consolidated net sales of 2.9 trillion yen, operating profit of 350 billion yen (operating margin of 12%), and ROIC of 12%. To achieve these targets, the company will fundamentally transform its profit structure starting in fiscal 2025 through business reorganization, consolidation of facilities, and workforce optimization. It will improve profit margins by reducing variable costs through downsizing unprofitable operations and lowering material costs, and cutting fixed costs primarily in manufacturing overhead. Additionally, the company is allocating a strategic investment budget of approximately 1% of sales for systems, digitalization, advanced development, and automation investments, demonstrating its commitment to sustained growth investments.

The company has identified five core business pillars as its growth priorities, with particular focus on high-demand areas including water-cooling modules for AI servers, motors for electric vehicles, renewable energy storage systems, and industrial high-efficiency motors. Its differentiation strategy centers on in-house component manufacturing, expanded production capacity, cost competitiveness through quality assurance, and the ability to provide integrated solutions from standalone motors to control systems and modules. The company is building competitive advantages through technology tailored to specific applications, such as strengthening water-cooling technology for AI applications that generate excessive heat beyond air-cooling capabilities.

The company is pursuing a combined strategy of M&A and localization to develop new markets and expand operations. In the machine tool sector, following the acquisition of Mitsubishi Heavy Industries Machine Tool (now Nidec Machine Tool), the company has added OKK, PAMA, and TAKISAWA to expand its product lineup, targeting global market leadership by fiscal 2030. In the automotive sector, the company is expanding market share through region-specific "local production for local consumption" strategies, including launching E-Axle mass production through European joint ventures, reducing costs through local parts procurement in China, and strengthening sales in India, a major market for two-wheeled electric vehicles.

The company positions technological innovation as the driver of growth and continues aggressive investment in research and development, automation, and energy-saving technologies. Organizationally, it is strengthening its Chief Officer system and advancing technology succession through a fellowship program to accelerate decision-making and build a lean global structure. On the environmental front, the company has set long-term targets of net-zero CO2 emissions (Scopes 1 and 2) by fiscal 2040 and net-zero across the entire supply chain (Scope 3) by fiscal 2050. It has established interim targets of 42% reduction in Scopes 1 and 2 and 25% reduction in Scope 3 by fiscal 2030 compared to fiscal 2022, validated through SBTi, to enhance technological and environmental competitiveness across both products and business operations.