In 1973, a 28-year-old engineer named Shigenobu Nagamori founded a motor company in a converted barn in Kyoto with three employees and no customers. Half a century later, Nidec Corporation is the world’s largest manufacturer of small precision motors, employs over 100,000 people across more than 40 countries, generates annual revenue exceeding 2.3 trillion yen, and is making a massive bet that its future lies in powering the electric vehicles that will transform global transportation. This is the story of one man’s obsession with motors — and how that obsession built an industrial empire.
The Founding: A Barn, Three Employees, and an Obsession
Shigenobu Nagamori was born in 1944 in Kyoto Prefecture and developed a fascination with motors as a child, reportedly disassembling and reassembling electric motors from household appliances. After studying at Kyoto Municipal Technical College (now part of Kyoto Institute of Technology), he worked at several companies before founding Nidec Corporation (originally Nihon Densan) on July 23, 1973.
The company’s founding circumstances have become the stuff of Japanese business legend. Nagamori started with three employees in a rented prefabricated building in the Nishikyogoku district of Kyoto. He had no factory, no major customers, and limited capital. What he had was a conviction that the world’s demand for small, efficient electric motors would grow inexorably as electronics became more pervasive, and that a company focused exclusively on motors could build an unassailable competitive position.
Nidec’s first product was a spindle motor for hard disk drives (HDDs). In the early 1970s, the personal computer revolution was still a decade away, but Nagamori recognized that magnetic data storage was a growth market and that the spindle motor — which rotates the disk platters at precise, constant speeds — required exactly the kind of engineering precision that he believed his company could deliver better than anyone else.
The HDD Motor Monopoly
Nagamori’s bet on HDD spindle motors proved spectacularly successful. As the personal computer industry exploded in the 1980s and 1990s, demand for hard disk drives grew exponentially, and every drive required a spindle motor. Nidec invested relentlessly in improving motor efficiency, reducing vibration, and lowering costs, gradually capturing market share from competitors until it achieved a position of overwhelming dominance.
By the early 2000s, Nidec held over 75% of the global market for HDD spindle motors. At its peak, the company’s share exceeded 85%. This market position generated enormous cash flow and established Nidec as a recognized name in the global electronics supply chain. It also provided the financial foundation for the aggressive acquisition strategy that would define the company’s next chapter.
The M&A Machine: 60+ Acquisitions and Counting
If Nagamori’s motor obsession is the soul of Nidec, its acquisition strategy is the engine of growth. Over the past three decades, Nidec has completed more than 60 acquisitions, transforming itself from a specialist motor maker into a diversified industrial conglomerate with products spanning consumer electronics, automotive, industrial automation, and home appliances.
Nagamori’s acquisition philosophy is distinctive. He targets companies that are underperforming relative to their potential — often manufacturers with strong technology and customer relationships but poor operational efficiency. After acquisition, Nidec applies its rigorous cost management and operational improvement methodologies, which Nagamori calls “WPTK” (Will Power, Thinking Hard, Knowledge, and Technology), to improve margins and growth. The integration process is typically rapid and sometimes controversial, with significant management changes and operational restructuring.
| Year | Acquisition | Business | Strategic Rationale |
|---|---|---|---|
| 2003 | Sankyo Seiki | Precision motors, card readers | Scale in small motors |
| 2010 | Emerson Electric (motor divisions) | Industrial/commercial motors | Entry into large motors |
| 2012 | Ansaldo Sistemi Industriali | Industrial drives (Italy) | European industrial presence |
| 2014 | MINSTER Machine Company | Press machines (US) | Automotive press equipment |
| 2017 | Secop (Embraco rival) | Compressor motors | Home appliance motors |
| 2019 | OMJC Signal (now Nidec Motor) | Traction motors | EV motor capabilities |
| 2021 | Mitsubishi Heavy Industries Machine Tool | Machine tools | Vertical integration for EV |
Sources: Nidec Corporation corporate announcements, annual reports, press releases
The acquisitions have dramatically expanded Nidec’s scale and scope. The purchase of motor divisions from Emerson Electric in 2010 was a transformative deal that gave Nidec a major position in large industrial motors and established a significant manufacturing presence in the United States and Mexico. The Embraco compressor motor business brought Nidec into the home appliance market. And a series of smaller acquisitions in industrial automation, robotics, and press equipment expanded the company’s automotive industry footprint.
Financial Scale: From Barn to ¥2.3 Trillion
Nidec’s revenue growth over five decades has been extraordinary. The company crossed the 100 billion yen mark in the mid-1990s, reached 1 trillion yen in 2015, and surpassed 2 trillion yen in 2022. Listed on the Tokyo Stock Exchange (TSE: 6594), Nidec had a market capitalization of approximately 3 trillion yen as of early 2026.
| Fiscal Year | Revenue (¥B) | Operating Income (¥B) | Operating Margin |
|---|---|---|---|
| FY2020 | 1,534.8 | 119.7 | 7.8% |
| FY2021 | 1,918.2 | 175.9 | 9.2% |
| FY2022 | 2,242.8 | 149.0 | 6.6% |
| FY2023 | 2,347.1 | 154.6 | 6.6% |
| FY2024 | 2,349.5 | 180.8 | 7.7% |
Sources: Nidec Corporation Annual Securities Reports, Tokyo Stock Exchange filings
The operating margins, while modest compared to asset-light technology companies, are respectable for a diversified manufacturer with a large workforce and significant capital investment. Nidec’s target is to achieve an operating margin of 15% through a combination of portfolio optimization, operational efficiency improvements, and increased revenue from higher-margin automotive products. Achieving this target has proven elusive, however, and the gap between aspiration and reality has been a recurring theme in Nidec’s investor communications.
Nagamori: The Legendary, Controversial Leader
No discussion of Nidec is complete without an examination of Shigenobu Nagamori, who has served as the company’s chairman, president, and chief executive at various points over the past fifty years and remains the dominant figure in its corporate governance. Nagamori is one of the most colorful and polarizing figures in Japanese business, known for his intensity, his demanding management style, and his willingness to make public statements that would be considered extraordinary by the standards of conventional Japanese corporate leadership.
Nagamori’s management philosophy is built on a few core principles. He believes that effort and determination are more important than innate talent, a conviction he expresses in his famous motto: “IQ is less important than EQ (effort quotient).” He demands extreme dedication from his employees, famously stating that he expects them to work until they succeed, regardless of obstacles. He is personally involved in operational details to a degree that is unusual for the CEO of a company with over 100,000 employees, reportedly reviewing daily sales figures and intervening directly in underperforming business units.
The Succession Challenge
The most pressing governance question facing Nidec is leadership succession. Nagamori, now in his early eighties, has attempted to install a successor multiple times, but each attempt has ended with the designated successor departing the company. Yoshihiro Hidaka, who was appointed CEO in 2021 with the expectation of eventually succeeding Nagamori, was replaced in 2022 after less than a year and a half. Previous succession candidates met similar fates.
The pattern suggests a fundamental tension between Nagamori’s management intensity and the autonomy that a successor would need to establish his or her own leadership. As long as Nagamori remains active in the company’s affairs, any CEO operates in his shadow. This succession uncertainty is a risk factor that investors and partners must consider when evaluating Nidec’s long-term prospects. The company’s culture, strategy, and operational discipline are all deeply intertwined with Nagamori’s personal leadership, and it remains unclear how effectively these attributes can be institutionalized and transmitted to a new generation of management.
The HDD Decline and the Need to Pivot
The technology that built Nidec’s fortune is now in structural decline. Hard disk drives, once the universal storage medium for computers and data centers, are being progressively displaced by solid-state drives (SSDs), which use flash memory chips instead of spinning magnetic platters and therefore require no motors at all. HDD shipments have fallen from approximately 650 million units per year at their 2010 peak to under 150 million units in recent years.
Nidec recognized this threat early and has been systematically diversifying away from HDD motors for over a decade. The company’s HDD motor business, which once accounted for the majority of revenue, now represents a relatively small fraction of the total. However, the transition has not been painless. HDD motors were an extraordinarily profitable product — Nidec’s dominant market share and manufacturing efficiency generated margins well above the company average — and replacing this profit pool with revenue from lower-margin businesses has been a persistent challenge.
The EV Bet: Nidec’s Biggest Gamble
Nagamori has staked Nidec’s future on the conviction that electric vehicles will create the largest new demand for motors since the industrial revolution. Every electric vehicle requires one or more traction motors to drive its wheels, and as the global automotive industry transitions from internal combustion engines to electric powertrains, the market for automotive traction motors is projected to grow from approximately $10 billion annually to over $30 billion by 2030.
Nidec has invested heavily in developing and manufacturing EV traction motors and integrated e-axle systems — units that combine the motor, inverter, and gearbox into a single compact package. The company has built dedicated e-axle production facilities in China, Mexico, Poland, and Serbia, and has secured supply contracts with several major automakers.
Nagamori’s vision is for Nidec to become the dominant supplier of EV traction motors globally, replicating in the automotive industry the market position it achieved in HDD spindle motors. He has publicly stated a target of capturing 40% to 45% of the global EV motor market by 2030, a goal that would make Nidec one of the most important companies in the global automotive supply chain.
The Competitive Reality
Achieving this goal will not be easy. The EV traction motor market is far more competitive than the HDD spindle motor market ever was. Nidec faces competition from multiple directions:
Automotive OEMs: Many major automakers, including Tesla, BYD, and BMW, design and manufacture their own traction motors in-house. These companies have deep electrical engineering capabilities and view the motor as a core differentiating technology that they are reluctant to outsource. Tesla’s permanent magnet reluctance motors, in particular, are widely regarded as among the most efficient in the industry.
Automotive Tier 1 Suppliers: Established automotive suppliers such as Bosch, ZF Friedrichshafen, BorgWarner, and Magna International are all developing and selling EV traction motors and e-axle systems. These companies have decades of automotive industry experience, established relationships with OEMs, and deep understanding of automotive quality and safety requirements.
Chinese Competitors: Chinese motor manufacturers, including BYD’s subsidiary and companies like Jing-Jin Electric, are rapidly scaling EV motor production to serve China’s massive domestic EV market. Chinese companies benefit from lower labor costs, government support, and proximity to the world’s largest EV market.
Nidec’s competitive advantages in the EV space include its deep motor design expertise (accumulated over fifty years across multiple motor types), its global manufacturing footprint, and its willingness to invest at scale ahead of demand. However, the company must overcome its relative lack of automotive industry experience and the perception among some OEMs that it is a consumer electronics supplier attempting to enter the automotive world.
Product Portfolio: Motors Everywhere
Beyond HDD motors and EV traction motors, Nidec produces an astonishing variety of motors and motor-adjacent products for virtually every industry.
Automotive Components: In addition to traction motors, Nidec supplies motors for electric power steering, electric braking, seat adjustment, window operation, HVAC systems, and other automotive applications. The company estimates that a modern vehicle, whether electric or conventional, contains 40 to 100 small motors, each representing a potential Nidec product.
Home Appliances: Following the Embraco-related acquisitions, Nidec is a major supplier of compressor motors for refrigerators and air conditioners, fan motors for ventilation systems, and drum motors for washing machines. The global push toward energy-efficient appliances, driven by regulatory requirements and consumer demand, favors Nidec’s high-efficiency motor designs.
Industrial Automation: Nidec produces servo motors, stepper motors, and drives used in factory automation equipment, robotics, and CNC machines. The company’s acquisition of Mitsubishi Heavy Industries Machine Tool in 2021 expanded its capabilities in this sector.
Data Center Cooling: As hyperscale data centers proliferate to support cloud computing and AI workloads, the demand for efficient cooling systems has created a new growth market for Nidec’s fan motors and liquid cooling solutions. Data center operators prioritize energy efficiency above almost all other design criteria, and Nidec’s expertise in high-efficiency motor design is directly applicable.
Global Workforce and Operations
Nidec employs over 100,000 people worldwide, with manufacturing operations in Japan, China, Thailand, Vietnam, the Philippines, Mexico, Poland, Serbia, and numerous other countries. This global footprint reflects both the company’s organic growth and the geographic distribution of its acquired businesses.
The company’s operational culture reflects Nagamori’s management philosophy: intense focus on cost reduction, rapid decision-making, and aggressive performance targets. Newly acquired companies often experience a cultural shock as Nidec’s operational improvement teams implement cost-cutting measures, restructure management, and impose rigorous performance tracking systems. While this approach has reliably improved the profitability of acquired businesses, it has also generated friction with employees and labor organizations in some markets, particularly in Europe.
Challenges and Outlook
Nidec faces a complex set of challenges as it navigates the transition from its legacy business to its EV-centric future. The HDD motor business continues to decline, compressing revenue in a high-margin segment. The EV traction motor business is growing but has not yet achieved the scale or margins needed to fully replace HDD motor profits. The company’s margin targets remain aspirational rather than achieved, creating investor frustration.
The succession question looms over everything. Nagamori’s personal involvement is both Nidec’s greatest asset and its most significant risk. His vision, energy, and dealmaking ability have built the company from nothing to over 2 trillion yen in revenue. But the absence of a clear succession plan creates uncertainty about whether Nidec’s culture and strategy can survive the eventual transition to new leadership.
Despite these challenges, Nidec’s strategic position is formidable. The world’s economy runs on motors. Every appliance, vehicle, factory, and data center contains motors, and the trend toward electrification — of transportation, heating, cooling, and industrial processes — will increase the total number of motors in the global economy for decades to come. If any company is positioned to benefit from this trend, it is the one whose founder has spent his entire life obsessed with making them.
For International Partners and Investors
For companies seeking motor supply partnerships, Nidec’s breadth of product portfolio and global manufacturing presence make it a versatile and capable supplier. However, potential partners should be prepared for Nidec’s demanding negotiation style and operational expectations, which reflect Nagamori’s influence throughout the organization. The company is particularly eager to expand its EV traction motor customer base and may be willing to make significant concessions on pricing and customization to secure strategic supply agreements with major automakers.
For investors, Nidec represents a high-conviction bet on the electrification of the global economy, filtered through the vision and intensity of one of Japan’s most remarkable entrepreneurs. The investment thesis ultimately rests on two questions: can Nidec establish a profitable, leading position in EV traction motors, and can the company successfully navigate the leadership transition when Nagamori eventually steps back? The answers to these questions will determine whether Nidec’s next fifty years are as remarkable as its first.
Interested in partnering with Nidec or similar Japanese companies? Contact Japonity — we connect global businesses with Japan’s most innovative companies.
