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Japanese motor maker takes China hit
Fierce price competition in Chinese EV market means Nidec needs to shuffle its strategy
Japanese electric motor manufacturer Nidec is restructuring its EV battery division — in which its electric drivetrain technology sits — after ongoing fierce competition in the Chinese EV market hurt its bottom line.
The company has revised its fiscal year (April-March) 2023 earnings forecast down by 18pc, or ¥40 billion ($305mn), in anticipation of the costs of restructuring the division.
“In battery EV-related business, extreme price competition in [the] Chinese EV market is likely to continue and may spoil market fairness,” the firm says. “The company has shifted the strategy to put first priority on its profitability, such as limiting orders for unprofitable models.”
The firm will aim to make further significant reduction to fixed costs in the division in the coming quarter, and further localise its product development and procurement.
The firm expects profitability to improve further in the fourth quarter of the fiscal year.
Nidec has invested heavily in its e-axle EV drive system in recent years, which it has been promoting in China. Last year it began adapting the system to be suitable for smaller vehicles in the Chinese market.