Nidec plans JV with Guangzhou Group for EV traction motors

Japan’s Nidec Corporation, the world-leading motor manufacturer encompassing more than 300 subsidiaries employing over 100,000 people throughout the world and with annual sales exceeding $13 billion (Rs 89,765 crore), plans to set a joint venture with GAC Components Co, a member of China-based Guangzhou Automobile Group Co to manufacture low-cost, high-efficiency traction motors for Guangzhou Automobile Group.

The planned JV is in line with Nidec’s global growth strategy which will see expansion and strengthening of its automotive motor business, one of the company’s strategically critical businesses under Vision 2020, the company’s mid-term strategic goal.

Nidec aims to ride the global demand for electric vehicles, even as many countries around the world have either announced restrictions or future bans on the sale of petrol and diesel vehicles to combat global warming and air pollution, making zero-emission vehicles a global trend. Accordingly, car manufacturers are launching measures globally, including the acceleration of the pace of introducing EVs.

As this trend of car electrification intensifies, the automotive motor market, strategically important for Nidec, is forecast to double its size to six trillion yen in 2030. Among all the products in the market, companies’ attention and Nidec’s particular focus are on the traction motor, one of the most important components to replace the existing internal-combustion engine.

GAC Components is a subsidiary of a major Chinese car manufacturer Guangzhou Automobile Group that has the sixth largest market share in the increasingly environmentally strict China. GAC Components mainly manufactures automobile interior parts and electric components both for EVs and PHEVs under the Guangzhou Automobile brand, which plays a significant role in the transition to EVs, but also joint ventures with Japanese car manufacturers.

GAC Components and Nidec, realizing the strategic importance of traction motors in the future automobile industry, have agreed to collaborate to

The joint venture company will exploit Guangzhou Automobile Group’s collective know-how on finished vehicles mechanism and Nidec’s drive and electronics technologies to develop, manufacture, and sell low-cost, high-efficiency traction motors mainly for Guangzhou Automobile Group, and later, other car manufacturers as well. Further, the joint venture company will hire development engineers locally in China, which is abundant in such resources, to accelerate the pace of product development and design, while utilising Guangzhou Automobile Group’s local purchasing capabilities to promote cost reduction.