Nidec Corp. has adopted a resolution to execute a contract with GAC Components Co. Ltd., a member of China-based Guangzhou Automobile Group Co., to establish a joint venture to manufacture automotive traction motors.
The closing of the joint venture will be subject to approval by competition authorities.
Nidec has been expanding and strengthening its automotive motor business, one of the company’s strategically critical businesses, by setting the business’s target sales amount to 700 billion to 1 trillion yen under Vision 2020, the company’s mid-term strategic goal.
Countries around the world have announced efforts to reduce sales of gasoline and diesel vehicles one after another 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 electric vehicles (EV) more than ever. As this trend of car electrification intensifies, the automotive motor market, strategically important for Nidec, is forecast to double its size – to 6 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, which has the sixth largest market share in the increasingly environmentally strict China. GAC Components mainly manufactures automobile interior parts, electric components, etc. for not only the 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 produce low-cost, high-efficiency traction motors for Guangzhou Automobile Group.
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. In addition, 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 utilizing Guangzhou Automobile Group’s local purchasing capabilities to promote cost reduction.
