Nidec may be the king of the industry, one of the reasons is that it is more like a Chinese company

"Nidec has two typical Chinese characteristics, one is to quickly adapt to the iterative update of the market, and the other is to take the scale cost advantage as the core competitiveness."

Author: Monograph of the Institute

Image source: Figureworm creative

China is the main arena for new energy vehicles in the world, and the industry generally believes that Compared with the New Energy Vehicles in the United States and China, Japanese auto companies such as Toyota and Honda have fallen one step behind. But there is a Japanese company that is quietly weaving a huge industrial cluster, with the goal of becoming the king behind the development of the new energy automobile industry, and this company is Nidec.

Enterprises that provide a package of foundries for pure electric vehicles

It will no longer be a supporting role, but will occupy the center of the stage

Nidec is the number one company in the world for brushless motors. In traditional cars, car motors are only auxiliary parts, but with the development of automotive EV and autonomous driving technology, the number of drive motors is increasing, and the performance requirements for motors are becoming more and more complex, and the drive motors have become the "heart" of electric vehicles.

Why is nidec likely to become a company that can influence the development of the new energy automobile industry?

First of all, because pure electric vehicles have completely subverted the industrial pattern of traditional automobiles, more and more "crossovers" such as Tesla and Weilai have risen to become emerging pure electric vehicle forces, and most of the manufacturing business of such cross-border enterprises is outsourced, which will make auto parts and supporting enterprises promising. In the era of pure electric vehicles, the parts companies behind the scenes will no longer be supporting roles, but occupy the center of the stage. There is such a trend in denkag.

Nidec not only has the core competitiveness of the "heart" of the car, but also extends to the internal organs and skeletal muscles of the car. Nidec proposed a "Supplier Town" with parts for pure electric vehicles and where factories are clustered around. In 2021, Nidec began to gather related companies around the new plant in Dalian, and in addition to parts related to drive motors, it will also attract plants of 20 types of parts related to brakes and power steering to form a package of foundry industry alliances for electric vehicles (EVs). Nidec also envisions a future involvement in automobile chassis, and plans to produce most of the components of the entire vehicle without body and batteries, reaching one-third of the total vehicle cost.

Nidec President Guan Run said that in the context of the growing pure electric vehicle market, in the future to provide a package of oem for pure electric vehicles in the industry enterprises will gain more and more obvious competitive advantages. Nidec strives to become a company like Bosch, Germany, known as a "Mega Supplier" and capable of supplying parts to a wide range of domestic and foreign automotive companies.

Densan is more like a Chinese company

This makes it a success in the Chinese market

Another reason why Nidec may become the king is that from the perspective of his business logic and business strategy, he is not like a Japanese company, but more like a Chinese company, which makes Nidec feel comfortable in the Chinese market.

Nidec has two typical Chinese characteristics, one is to quickly adapt to the iterative update of the market, and the other is to take the scale cost advantage as the core competitiveness.

Nidec China President Kafi Teruyuki once said in an interview that he was grateful for the enlightenment brought by Chinese mobile phone companies, and their advantage is that the development cycle is very fast, and Chinese mobile phone companies can iterate twice or three times a year.

Nidec began developing the E-Axle for Geely Automobile in May 2019, including vehicle adaptation, and began mass production in just one year. GAC new energy vehicles were also made in less than a year, which was a speed that Japanese, European, and domestic suppliers could not keep up with at that time. Kafue Teruyuki said, "In this process, Nidec has established a product iteration speed that is difficult to see in Japanese companies. It's more like an Internet company in the field of electric drives. He believes that speed is a crucial factor in winning and retaining Chinese customers, which is one of the keys to Nidec's standout.

In order to speed up the technology iteration, Nidec has established the company's most advanced electric vehicle motor research and development center in Suzhou to quickly manufacture prototypes according to customer needs. The Suzhou R&D center has the most comprehensive test facility in the industry, which can simulate various conditions to test the durability of the motor in high temperature or muddy conditions. Typically, the development of prototype products takes 6 months to 1 year, and now electroproduction can be completed within a month and a half.

In terms of competitive strategy, unlike other Japanese companies, Nidec not only does not shy away from price competition, but also uses low cost and low price as a weapon of competition. Nidec has always pursued a strategy of striving for market share at low prices, and when the share is getting higher and higher, it can establish economic benefits and profit margins will reach a certain level, which is a typical Chinese business model.

How to achieve low cost and low price, Nidec is also a typical Chinese strategy. On the one hand, it is to reduce costs through capacity expansion. Nidec is investing heavily in China, with a planned annual production capacity of 1 million units in Pinghu, Jiaxing, Zhejiang Province, and in August 2021, Nidec's first new energy production line entered mass production. Immediately after November 2021, the second new energy production line entered the sample stage. It is understood that the new energy production line has a total investment of 100 million yuan and an annual planned production capacity of 100,000 sets, and is expected to be officially produced in June 2022. In Dalian, in the north, in March 2020, Nidec invested 100 billion yen to build a new Nippon industrial cluster, and the new dalian plant will produce up to 3.6 million new energy vehicle motors per year, which is the world's largest pure electric vehicle motor plant. Nidec's stated goal is to "capture more than 40% of the world's share by 2030" in the field of pure electric vehicle motors.

On the other hand, it is the integration of the industrial chain, which is also the ability of Chinese enterprises to excel. In January 2022, Nidec renamed the mitsubishi heavy industries machine tool newly acquired in August 2021 to Nidec Machine Tool, and will build a new plant of machine tools in Pinghu, Zhejiang Province, and is expected to start production in the spring of 2023, which is mainly used to produce gears for electric vehicles (EVs) and other products, with an investment scale of 50 billion yen. Nidec also led other Japanese companies to do industrial support for it, on April 1, 2022, Japan JFE Corporation vehicle motor core project signed a contract in Pinghu, with a total investment of 34 million US dollars, mainly for Nidec to provide motor cores, the annual output value is expected to exceed 700 million yuan after production. In Dalian, there are also a number of Japanese companies supporting the industry such as Fujiyang Steel Processing Company. Through a series of industrial chain integration, Nidec can currently make itself in addition to power devices, and the self-control rate has reached more than 80%.

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