Nidec Corporation, the Japanese electric motor manufacturer, announced on Tuesday its forecast for a record net profit of 165 billion yen ($1.06 billion) for the fiscal year ending March 2025, marking a 32% increase. This growth is part of a strategic pivot that includes scaling down its electric vehicle (EV) parts operations in China due to fierce competition and capitalizing on the rising demand for industrial motors in the U.S.
Projected sales are expected to rise by 2% to 2.4 trillion yen, with an operating profit forecast to jump 41% to 230 billion yen, though these figures fall short of market expectations. The announcement saw Nidec shares dip by 3% on Japan’s Private Trading System after closing on the Tokyo Stock Exchange.
With a significant portion of its revenue generated overseas, Nidec remains sensitive to currency fluctuations. A 1 yen depreciation against the dollar translates to a 10 billion yen increase in annual sales and a 1.1 billion yen rise in operating profit, based on the company’s assumed exchange rate of 145 yen to the dollar for the fiscal year.
The company is optimistic about its EV parts division, particularly its E-Axle traction motor systems, which are slated for recovery and profitability in the latter half of the fiscal year. A third-generation E-Axle, expected to launch this summer, promises integrated components that could lower costs and enhance profitability, with sales projected to quadruple to over 800,000 units.
Nidec’s strategic focus on profitability was emphasized by CFO Akinobu Samura during a news conference in Osaka. He highlighted the company’s cautious approach to the competitive Chinese market, opting to enhance technological capabilities rather than expand aggressively.
Further bolstering its EV parts strategy, Nidec’s joint venture with European automaker Stellantis, which began producing E-Axles in September 2022, will contribute to consolidated earnings this fiscal year, supplying major brands like Peugeot, Fiat, and Jeep.
Despite a slowdown in the overall EV market growth, Nidec remains committed to its long-term goal of selling 10 million E-Axles by fiscal 2030. The company also reported strong performance in its home appliance, commercial, and industrial motor business, driven by robust demand in the U.S. Additionally, growth is anticipated in its machine tool business and data center cooling equipment sector.
In a significant leadership transition, Nidec’s founder Shigenobu Nagamori has moved to the role of executive chairman, with former Sony executive Mitsuya Kishida stepping in as president. This change is part of Nidec’s broader strategy to reach a consolidated sales target of 4 trillion yen by March 2026, focusing on acquisitions and revitalizing its EV parts business.
