OSAKA -- Japan's Nidec and French automaker PSA will form a joint venture next spring to produce motors for electric vehicles, aiming to drive down costs through mass production.
This marks the first move by the acquisitive Kyoto-based manufacturer into traction motors, which propel electric vehicles down the road. Automotive components are a forte of Nidec, which supplies motors for power steering and braking systems.
The 50-50 joint venture, to be based in France, builds on a Nidec acquisition earlier this year in that country.
The partners will invest a total of about 220 million euros ($260 million) in development and production. Plans call for starting mass-production of motors in 2022 at a factory in France. The goal is to have the motors go into all PSA vehicles, said Gilles Le Borgne, executive vice president of quality and engineering at the French automaker, which owns Peugeot and Citroen. The factory will also supply motors to other automakers.
Nidec's low-cost technologies and PSA's expertise in compact vehicles will be brought together to devise energy-saving motors.
In the early days of electric vehicles, automakers would often supply their own motors. Nidec believes the time is ripe for specialized parts suppliers to take over and capitalize on economies of scale.
Nidec "ships motors to the world, and we are very cost-competitive," Nidec Chairman and CEO Shigenobu Nagamori said at a news conference with Le Borgne Monday. "We are absolutely going to win on cost."
PSA's home country is moving toward banning sales of new gasoline and diesel cars by 2040. Other European countries have set similar goals, creating an incentive for the partners to base motor production in France.
The partnership is just one example of how electrification is breaking down barriers between the automotive and other industries.
In other electric-vehicle-related moves, Honda Motor and Hitachi unit Hitachi Automotive Systems formed a Japanese joint venture in July to produce motors. The following month, Nissan Motor sold the subsidiary that supplies batteries for its Leaf electric vehicle to Chinese private equity firm GSR Capital.
Nidec aims to raise its sales to 10 trillion yen ($88.6 billion) by fiscal 2030, with the automotive segment to account for 4 trillion yen.