ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailPositive ArrowIcon PrintIcon Twitter
Electronics

Auto demand will more than double on cheap EV models, Nidec says

Nagamori, founder of top electric motor maker, to give CEO job to President Seki

Nidec announced that founder chairman Shigenobu Nagamori, 76, will step down as CEO, with president Jun Seki assuming the position.(File photo by Hiromasa Matsuura)

TOKYO -- Demand for automobiles will more than double as cheap electric vehicles become available in China, said an executive at Nidec, the world's largest maker of electric motors, on Thursday.

Jun Seki, president and chief operating officer, made the ambitious forecast during an online briefing of the company's annual results.

Global auto demand currently totals about 90 million but Seki said: "EVs will create additional demand of 100 million to 200 million."

Indeed, the $4,400 mini EVs made by SAIC-GM-Wuling Automobile of China have been hugely popular. Seki said those EVs "have created demand among people who previously couldn't afford cars."

Shigenobu Nagamori, Nidec chairman and CEO, agreed, saying: "Growth of the EV market will be led by small cars," and not expensive models.

Shigenobu Nagamori, Nidec chairman and CEO said "Growth of the EV market will be led by small cars" during a press conference on April 22. (Screenshot from Nidec's Webiste)

Nidec reported on Thursday a 47% increase in operating profit to 160 billion yen ($1.48 billion) in the year ended March from a year ago on the back of strong demand for personal computers and home appliances, along with a global shift to electric vehicles.

Nidec also saw sales rise 5.4% to 1.618 trillion yen over the same period.

For the next fiscal year, Nidec expects a record operating profit of 180 billion yen, up 12% from a year ago. It sees sales rising 5.1% to 1.7 trillion yen, which will also be a record. The company said it had kept estimates conservative, given a slowdown in auto production due to a global dearth of semiconductors.

Nidec produces electric motors for cars, appliances and computer hard disk drives.

The company, originally a maker of personal computer components, has moved into other areas in recent years, such as home appliances and automobiles, where electric motors are more widely used than before.

Nidec derives more than 80% of revenue from overseas but suffered a setback as the U.S.-China trade war has intensified since 2018. It was hit again in early 2020 by the coronavirus outbreak.

Business has started to improve since late last year as auto production and investment in EVs rebounded worldwide.

The pandemic has resulted in surging demand for small motors used in notebook computers and home appliances.

On Thursday, Nidec announced too that Nagamori's CEO position will be assumed by Seki, on top of his title as president, after a shareholders' meeting in June. Nagamori founded Nidec 48 years ago and is the largest shareholder with a 8.4% stake

Nagamori will remain as chairman, with the right to represent the Kyoto-based company, but will leave management to Seki, a 59-year-old former Nissan co-chief operating officer, freeing him up to make speedy decisions.

"Given the extremely competitive business environment, it is necessary to make the organizational structure as simple as possible to allow for quick decision-making and nimble operations," Nagamori said.

Nagamori is regarded as a charismatic business leader who has created from the scratch the eighth biggest company in Japan with a valuation of 8.3 trillion yen ($77 billion).

Seki joined Nidec in January last year and was appointed COO three months later.

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Try 1 month for $0.99

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends January 31st

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to Nikkei Asia has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media

Nikkei Asian Review, now known as Nikkei Asia, will be the voice of the Asian Century.

Celebrate our next chapter
Free access for everyone - Sep. 30

Find out more