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Nidec to add electric-car motor production outside China

Trade war spurs diversification of fledgling business into Poland and Mexico

Nidec has started shipping parts to the U.S. from Mexico instead of China. (Photo by Kosaku Mimura)

OSAKA -- Nidec will build motors for electric vehicles at three locations around the world by 2020, rather than just China as previously planned, as the company rethinks its supply strategy amid an increasingly murky business outlook.

The Kyoto-based electrical equipment manufacturer is currently building a factory in China to begin mass production of a traction motor system including a gearbox and inverter developed this year. Now the company plans to make the modules in Poland and Mexico as well.

Even as U.S.-China trade tensions create "growing uncertainty," Nidec will "review our global supply structure to expand our market share," President and Chief Operating Officer Hiroyuki Yoshimoto told Nikkei on Wednesday.

In response to higher U.S. tariffs on Chinese products, Nidec has started shipping a number of home electronics and auto parts from Mexico instead of China, Yoshimoto said. The company has also made preparations to export large motors for such applications as generators to the U.S. from European production facilities, to compete more effectively with Chinese manufacturers facing higher costs.

Nidec will keep its annual capital investment around 150 billion yen ($1.34 billion) and develop traction motors into a core business, Yoshimoto said. The company targets 100 billion yen in sales of these motors in fiscal 2022, aiming to double this to 200 billion yen by fiscal 2025.

The new motor modules will initially be supplied to an electric vehicle affiliate of Guangzhou Automobile Group, with Nidec looking to sell to other automakers later on.

Meanwhile, Nidec is decentralizing power at the top. The five highest-level executives now meet weekly to discuss issues, with founder, Chairman and CEO Shigenobu Nagamori having the last word, Yoshimoto said.

Nagamori will oversee acquisitions and other medium- to long-term growth strategies while Yoshimoto manages efforts to improve earnings at business segments and group companies. The company aims to increase sales from 1.49 trillion yen in fiscal 2017 to 2 trillion yen in fiscal 2020, and on to 10 trillion yen by fiscal 2030, focusing on technological trends in autos, robots, energy-saving appliances and drones.

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