Nidec Corporation: history, ownership, mission, how it works & makes money

A Brief History of Nidec Corporation

Nidec Corporation, founded in 1973 by Shigenobu Nagamori, is a global leader in the manufacture of electric motors and related components. Initially, the company focused on small precision motors, which were essential for products like hard disk drives. The first significant product was a 3.5-inch floppy disk drive motor.

By the late 1980s, Nidec expanded its product range to include larger motors and began to penetrate international markets. In 1989, the company established its first overseas subsidiary in the United States, which marked the beginning of its global expansion strategy. The company went public on the Tokyo Stock Exchange in 1994, allowing it to raise capital for further growth.

Nidec's growth accelerated in the 2000s through strategic acquisitions. In 2006, Nidec acquired the motor division of Emerson Electric, significantly enhancing its capabilities in various sectors. By 2009, Nidec was recognized as a top supplier of hard disk drive motors, controlling a market share of over 70%.

In 2012, Nidec further diversified by acquiring Switched Reluctance Motor Technology from the United States, expanding its innovation in electric powertrains for automotive applications. This move was pivotal as the automotive sector began shifting towards electric vehicles (EVs).

As of 2023, Nidec Corporation reported total revenues of approximately ¥1.25 trillion (about $9.3 billion), reflecting a steady growth trajectory. The company also projected a revenue increase of 8% year-over-year, driven by robust demand in the EV and automation markets.

In recent years, Nidec has placed a significant emphasis on innovating electric motors designed for electric vehicles. In 2021, the company announced plans to invest ¥100 billion into EV motor production facilities, underscoring its commitment to this rapidly growing sector.

The company employs approximately 130,000 people globally and operates more than 200 subsidiaries. Nidec has achieved recognition for its sustainable practices, with a commitment to reducing carbon emissions from its operations by 25% by 2030.

As of October 2023, Nidec's stock price hovered around ¥9,500, reflecting a market capitalization of approximately ¥1.9 trillion (around $14 billion). The company's consistent performance has made it a valuable asset within the Tokyo Stock Exchange.

Nidec’s future outlook remains bullish as it continues to drive innovation in the motor sector, capitalizing on trends in automation, robotics, and electric vehicles. The company seeks to maintain its position as a key player by expanding its technological capabilities and market presence across various industries.

A Who Owns Nidec Corporation

Nidec Corporation, a prominent player in the global motor and electronic components market, has a diverse ownership structure primarily characterized by institutional and individual investors. As of the latest data available in 2023, the major shareholders include both domestic and international entities.

The largest institutional shareholders include well-known investment firms such as The Vanguard Group, Inc. and BlackRock, Inc. As of the second quarter of 2023, The Vanguard Group held approximately 8.5% of the shares, while BlackRock owned around 6.7%.

In terms of individual ownership, the company’s CEO, Shigenobu Nagamori, is a notable figure, holding a significant personal stake in the company. His leadership has catalyzed substantial growth and innovation within Nidec, particularly in the development of high-precision motors and other electronic components.

The market capitalization of Nidec Corporation was approximately ¥6.7 trillion (around $60 billion) as of October 2023. This significant market presence underscores the importance of institutional investors, whose combined investments greatly influence the stock price and overall valuation.

In summary, the ownership of Nidec Corporation reflects a mix of institutional strength and executive leadership, with key financial metrics illustrating the company's robust market position. The diverse shareholder base plays a crucial role in guiding the strategic direction and operational efficacy of the corporation.

Nidec Corporation Mission Statement

Nidec Corporation's mission statement encapsulates its commitment to contributing to the advancement of society through technology. The company aims to achieve growth by focusing on quality, customer satisfaction, and innovation in the development of electric motors and their components.

The mission is not just about economic success but also emphasizes corporate responsibility and sustainable practices. Nidec strives to be a global leader in the electric motor industry by aligning its operations with sustainable development goals.

Core Principles

• Innovation: Nidec invests approximately 7.6% of its annual revenue in R&D, totaling around ¥52.6 billion (about $475 million) in the fiscal year 2022.
• Quality: The company's focus on quality improvement led to a 12% reduction in defect rates across its product lines in recent years.
• Customer Satisfaction: Nidec’s customer service initiatives have resulted in a 93% customer satisfaction rating, as reported in an internal survey conducted in 2023.
• Corporate Responsibility: Nidec has pledged to reduce its greenhouse gas emissions by 30% by 2030 compared to 2020 levels.

Recent Financial Data

Nidec’s revenue has exhibited a steady upward trend, with an increase of approximately 10.7% from 2021 to 2022. Net income also grew by around 8.6% in the same period.

Strategic Goals

• Global Expansion: Nidec aims to enhance its market presence in emerging economies, targeting a growth rate of 15% in sales from these regions by 2025.
• Technological Advancement: The company is working towards launching 20 new product lines in electric motor technology over the next three years.
• Sustainability Initiatives: Nidec plans to invest ¥10 billion (approximately $91 million) in green technologies by 2025.

The mission and strategic initiatives of Nidec Corporation highlight its dedication to innovation while maintaining a focus on sustainability and corporate responsibility. These factors combine to support Nidec’s long-term growth and commitment to global industries, further solidifying its position as a key player in the electric motor sector.

How Nidec Corporation Works

Nidec Corporation, headquartered in Kyoto, Japan, specializes in manufacturing electric motors and related components. The company operates through various segments, including the Appliance, Industrial & Commercial, and Electronics segments. As of the fiscal year ended March 31, 2023, Nidec reported a consolidated revenue of approximately ¥1.5 trillion (around $11.5 billion), showcasing a growth of 12.4% year-on-year.

The company’s product range is extensive, covering small precision motors for consumer electronics to large industrial motors. Nidec has a robust R&D framework, investing roughly 8% of its revenue annually into research and development initiatives to drive innovation.

Business Segments

• Appliance Segment - This segment generates significant revenue through residential and commercial appliances, contributing about 35% of total sales.
• Industrial & Commercial Segment - Responsible for 40% of total revenues, focusing on motors for automotive, robotics, and HVAC equipment.
• Electronics Segment - This segment is primarily focused on small precision motors for IT and telecommunications equipment, contributing the remaining 25% of overall revenue.

Financial Performance

Nidec’s financial health is reflected in its earnings. For the fiscal year 2023, the operating income was reported at ¥170 billion (approximately $1.3 billion), marking an increase of 18% compared to the previous year. The net income stood at ¥120 billion (around $920 million), showing a net profit margin of 8%.

Market Presence

The company has expanded its global footprint, with manufacturing facilities in countries including China, the USA, and Vietnam. Nidec employs over 110,000 employees worldwide. It holds a leading market position in various motor segments, particularly in hard disk drive motors, where it commands a market share of approximately 70%.

Innovation and Future Growth

Nidec is focusing on developing high-efficiency motors to capitalize on the growing demand for energy-efficient solutions. The company has set ambitious targets and is expected to invest ¥1 trillion (around $7.6 billion) over the next five years towards technology and product development. This includes a commitment to electric vehicle motors, with projections indicating that this market could grow substantially, potentially exceeding $100 billion globally by 2030.

Stock Performance

Nidec’s stock, listed on the Tokyo Stock Exchange under the ticker symbol 6594, has shown resilience in the face of global economic challenges. As of October 2023, the stock price is approximately ¥10,150, reflecting a year-to-date increase of around 15%. The company's market capitalization is estimated at ¥3 trillion (approximately $23 billion), highlighting its strong position in the market.

Key Partnerships and Acquisitions

Nidec has pursued strategic acquisitions to bolster its capabilities, including the acquisition of Kollmorgen in 2021 for about $1 billion, enhancing its industrial automation offerings. Furthermore, partnerships with various tech firms aim to expand its reach in the electric vehicle sector, thus diversifying its revenue streams.

Overall, Nidec Corporation continues to demonstrate strong operational capabilities, innovative prowess, and strategic growth initiatives that position it well within the global electric motor market.

How Nidec Corporation Makes Money

Nidec Corporation is a global leader in the manufacturing of electric motors and associated products. The company primarily generates revenue through a diversified product portfolio that caters to various sectors, including automotive, appliances, and industrial machinery. As of the fiscal year ending March 2023, Nidec reported consolidated sales of approximately ¥1.74 trillion (around $13.2 billion), showcasing their expansive market presence.

A significant portion of Nidec's revenue is derived from its core segments:

• Automotive Products: Nidec specializes in the production of small motor technology used in electric vehicles (EVs) and traditional gasoline vehicles. In FY 2023, the automotive segment accounted for about 29% of total sales, approximately ¥505 billion (about $3.85 billion).
• Appliance Products: This includes motors for home appliances such as refrigerators, washing machines, and air conditioners. The appliance segment generated around ¥460 billion (roughly $3.5 billion), accounting for 26% of total sales.
• Industrial Motors: This segment covers a wide range of motors used in factory automation and equipment. Industrial motors contributed approximately ¥400 billion (around $3 billion), representing 23% of total revenue.
• Other Businesses: This includes sales from other specialized motors and components, contributing the remaining 22% or about ¥375 billion (approximately $2.85 billion).

Below is a table summarizing the revenue breakdown by segment for FY 2023:

Nidec's strategic focus on electric vehicle technology has led to substantial investments, aligning with global trends toward electrification. In 2022, the company announced a plan to invest around ¥1 trillion (over $7.5 billion) into expanding its electric powertrain production capabilities over the next three years.

The company also aims to capitalize on the increasing demand for renewable energy solutions. Nidec's development of high-efficiency motors for wind turbines and other renewable energy applications is projected to propel its growth further. Sales from this segment are anticipated to increase by an estimated 15% annually over the next five years.

With a strong emphasis on research and development (R&D), Nidec allocated approximately ¥100 billion (about $760 million) to R&D in FY 2023. This focus enables Nidec to innovate and maintain its competitive edge across various industries.

Nidec has also strategically acquired companies to enhance technology and market access. For instance, in 2022, they acquired the Italian company, Embraco, for $1.08 billion, expanding their reach in the refrigeration market.

Overall, Nidec Corporation's revenue generation is streamlined across various sectors, with a significant focus on high-growth areas such as automotive and clean energy technology, ensuring robust financial performance and long-term sustainability.