Nidec Restructures Automotive Portfolio, Targets New Growth

Nidec is restructuring its automotive and home appliance portfolios as new CEO Michio Kaida redirects resources toward energy and infrastructure, AI and semiconductors, and machine tools. At an October 1 press conference in Kyoto, Kaida, who became president and CEO on September 29, said the company would streamline businesses and reallocate production technologies, personnel, and supply chains developed in those operations. The strategy is intended to improve capital profitability while preserving technologies that can be applied to new markets. Nidec Corporation’s management team is also preparing a mid-term plan while reviewing individual businesses and areas of focus.

Nidec attributed its large impairment losses to a previous management approach that emphasized broad expansion, uniform performance management, and short-term results. In the automotive business, the company said slower EV adoption and higher product costs associated with faster software-defined vehicle development were increasing pressure to lower component prices. At the same time, competition among suppliers was intensifying. Nidec said continued investment under these conditions resulted in an accumulation of excessive capital investment, contributing to the financial impact now being addressed through portfolio optimization and restructuring.

Nidec Shifts Resources Toward Growth Areas

The restructuring will place greater weight on capital profitability measures, including return on invested capital, when management evaluates businesses and allocates resources. Nidec plans to direct investment toward areas such as power generation, energy storage, and power conversion, while also expanding focus on HDD components and water cooling modules for data centers. These priorities reflect the company’s effort to shift resources toward businesses where it sees stronger growth potential and improve profitability. The company’s objective is to strengthen its financial foundation while creating a more disciplined framework for future investment decisions.

Despite the restructuring, Kaida said the automotive market continues to present significant business opportunities. He stressed that the impairment losses did not mean Nidec’s technologies had been lost. Instead, the company is considering how motor and mass-production technologies developed through its automotive operations can be applied to aviation and electric vertical takeoff and landing aircraft. Nidec intends to retain these technologies and use them in new fields, allowing capabilities developed for automotive applications to support potential opportunities beyond the company’s existing portfolio.

Nidec Reviews Business Units and e-Axle Operations

Nidec will consider customer contracts as it evaluates individual businesses during the restructuring process. Kaida said some operations could be considered for carve-outs or consolidation in the short term, while other businesses may require two to three years to restructure. No final decisions have yet been made on individual business units. The company is also reviewing its e-Axle operations and determining areas of focus as it develops its mid-term management plan. This approach indicates that restructuring decisions will be made selectively rather than through an immediate, company-wide change to every operation.

Alongside portfolio changes, Nidec plans to improve its internal management systems under the new leadership team. The company is developing its mid-term management plan while reassessing business priorities, capital allocation, and the role of existing technologies. The combination of restructuring, tighter profitability measures, and targeted investment is intended to address the financial effects of past expansion while positioning resources for selected growth areas. The next phase will depend on decisions about individual businesses, customer commitments, and how effectively Nidec can transfer established production and engineering capabilities into new applications.

Industry Impact & Outlook

Nidec’s restructuring could reshape how the supplier allocates capital across automotive and emerging technology businesses, particularly as slower EV adoption, software-driven development costs, and supplier competition pressure component economics. For the automotive industry, the decision to retain motor and mass-production expertise while exploring aviation and eVTOL applications shows how established automotive capabilities may be redirected rather than abandoned. The review of e-Axle operations and potential carve-outs or consolidation could influence Nidec’s future competitive position, while investment in energy and data-center technologies may become increasingly important to its growth strategy.

Frequently Asked Questions

What is Nidec changing under its new management team?
Nidec is reviewing and restructuring its automotive and home appliance portfolios while redirecting resources toward three identified growth areas: energy and infrastructure, AI and semiconductors, and machine tools. The company is also placing greater emphasis on capital profitability indicators such as return on invested capital when making management decisions. Some businesses could face short-term carve-outs or consolidation, while other restructuring efforts may take two to three years. Nidec is additionally reviewing its e-Axle operations and preparing a mid-term management plan under the new leadership team.