Nidec Founder Nagamori Talks about the Company’s Financial Situation and Strategy Moving Forward

Nidec recently recorded its highest net sales and operating profit, among other figures, on a first-half and quarterly basis, and also raised its year-end dividend projection, undaunted by global trade tensions and signs of weaker winds in the economy.

“If you want to fly a kite without wind, you need to run,” Nagamori said as he explained the company’s proactive approach to growing its operating profit unfazed by macroeconomic conditions. In truth, Nidec has been busily engaged in proverbial running as it is quickly regearing many of its factories to meet the production demand of markets that constitute the growing portions of the company’s current business portfolio. Among the growth areas special emphasis is being placed on motors and other components for automobiles, home appliances, as well as industrial, commercial and robotic applications. Factories in Southeast Asia that have previously been producing motors for hard disk drives are being used to manufacture robotic gears. Nidec is also investing in new overseas factories to produce its flagship product for automobiles: the e-axle traction motor system.

With a global production network comes flexibility. "We have approximately 210 factories spread out over 43 countries and we can supply the same products from any part of the world. This is one of our unique strengths," Nagamori said. The European footprint of Nidec’s robotic gear business has historically been relatively light, but that has changed with recent acquisitions made by the Japanese subsidiary Nidec-Shimpo that has strengthened the company group’s capabilities in this field as well.

Nagamori also touched upon the U.S.-China trade friction that is receiving attention in the news. "Some of our customers have requested that we transfer the production of some of our components produced in China to Mexico. This is not a problem at all; we have similar factories in Mexico, Vietnam and Romania to name a few countries. In fact, by freeing up space in our Chinese factories, we can increase the domestic production of automotive traction motors for the Chinese markets.”