Medium-and Long-Term Strategic Goals
Medium-Term Strategic Goal Vision 2020
Based on the medium-term strategic goal we announced in April 2015, we aim to achieve sales of two trillion yen, an operating profit ratio of 15% or more and a return on equity (ROE) of 18% or more by FY2020 through organic growth and M&A. Additionally, to further strengthen our business management system, we will establish a five regional headquarters management, by operating regional management companies respectively in China, Asia, America, and Europe (which also includes the Middle East and Africa) in addition to Japan. We will further strengthen our management base and stride forward to achieve the new medium-term strategic goal by improving management quality and efficiency, and actively providing PMI (post-merger integration) support.
Changing Our Business Portfolio for Growth
To achieve our goal of reaching two trillion yen in net sales, we are changing from a portfolio focused solely on small precision motors to one based on three additional pillars: automotive products; appliance, commercial and industrial products; and other products groups. We seek to further accelerate growth by working especially hard in the two key businesses of automotive products and appliance, commercial and industrial products.
Small Precision Motors
We will aim to increase the sales of small precision motors to a 600 billion yen range by FY2020 by focusing on creating new demands based on our technical advantages and improving profitability based on our competitive advantages.
HDD is mainly used in personal computers, servers and many other kinds of information-processing equipment, and the HDD motor serves as the heart of the HDD. We will endeavor to improve profitability in the HDD motor business, which has a stable market. Although the proliferation of tablets, smartphones and other new IT devices has limited further expansion of the PC market, we have entered the age of big data, which is characterized by high quality and high capacity for images, videos and other content as well as the spread of social media and games. The accompanying increase in the demand for storage capacity is expected to keep the demand for HDD motors for servers and other equipment stable in the future.
We will also strive for sustainable growth in the other small precision motors business through “Three-new Strategy” (initiatives to proactively explore new products, markets and customers). The bid to deliver more compact and energy-saving products has led to a rise in demand for thermal management, which includes managing the heat dissipated by equipment and their cooling functions. We seek to meet this demand by improving our technology for thermal modules, comprising heat sinks, heat pipes, vapor chambers and other components, and offering thermal solutions combined with motor products to the market. We seek to leverage the properties of our brushless DC motors—characterized by high energy efficiency, long life and quietness—to find new applications in diverse fields, such as AV, IT, OA, communication devices, appliances and industrial equipment, and stride toward sustainable growth.
Aiming for net sales of 600 billion yen by FY2020 by developing products with high-value-added modules.
The Nidec Group offers automotive motors such as electric power steering motors which enjoy the world’s largest market share, automotive cameras, control valves, electric oil pumps and other automotive components. In addition, we aim to grow further by supplying traction motors that make cars run, one of the basic performances of vehicles in addition to turning and stopping. Combining these products with Nidec Elesys’s electronic control units (ECUs) makes individual components function as sub-systems, and allows us to provide high-value-added modules.
Integrating motors with ECUs, sensors and other components, and thereby controlling electronically various functions of automobiles enables us to offer enhanced vehicle safety features such as safe driving, collision mitigation, damage minimization and autonomous driving, among others. Furthermore, replacing engines with motors is expected to contribute to improving automobile’s efficiency and reducing CO2 emissions.
Going forward, we aim to supply the automobile industry with automotive electronic components and sub-systems built upon our proven motors, ECUs and advanced sensors and to contribute to making safer, more environmentally conscious and comfortable automobiles.
Appliance, Commercial and Industrial Products
Aiming for net sales of 600 billion yen by FY2020 by pursuing synergistic effect in both sales and costs and improving profitability in these key growth businesses.
In the appliance, commercial and industrial products businesses, another strategic focus for the Nidec Group along with the automotive products business, we prioritize the enhancement of operating synergies conducive to improved sales and cost efficiency and, in turn, increased profitability. In this business category, we target 600 billion yen range in sales by FY2020. Products spearheading the growth initiative include motors for washing machines, dehydrators and dishwashers in the appliance sector, air conditioners in the commercial sector, and agricultural equipment, oil/gas refining, mining, water treatment, steel production, marine transportation and power generation in the industrial sector. We will strive for further growth in these businesses, with the rising awareness of energy conservation and accompanying regulatory developments as a constant tailwind.
Aiming for net sales of 200 billion yen by FY2020 by improving our speed reducers production capacity for small robots.
As demand for factory automation (FA) increases, we will continue to build and enhance competitiveness and stay ahead of emerging nations by improving profitability. For this purpose, we will start operations of a new factory to produce speed reducers for small robots and drastically improve our production capacity.
M&A is an essential part of our growth strategy
We seek business acquisitions that allow us to gain access to prospective technologies, new customer groups and untapped geographic markets. This is particularly the case when addressing the markets for automotive systems, home appliances and industrial equipment, which are vastly diversified and prone to exhibit distinct regional variations in customer preferences. In other words, business acquisitions will help swiftly globalize our motor production and supply networks in a manner that matches each regional need. Also, we will pursue business acquisitions that effectively diversify our business risks.
Long-term Goal: Net Sales Worth 10 Trillion by FY2030
Nidec has grown into an enterprise with net sales exceeding one trillion yen in just over 40 years since it was established in 1973. Our growth was particularly remarkable due to the tremendous spread of personal computers from the late 1990s.
The present age is riding on five big waves of innovation, against the backdrop of social issues such as global warming and shortage of labor. Nidec seeks to make the most of the business opportunities arising from these waves and achieve net sales worth 10 trillion yen by FY2030.