“Nidec-PSA emotors” Joint Venture created by Groupe PSA and Nidec starts the design of its future electric motors

MM Shigenobu Nagamori and Carlos Tavares, respectively Chief Executive Officer of Nidec and Groupe PSA (Paris:UG), endorsed today the establishment of Nidec-PSA emotors – the new Nidec Leroy-Somer and Groupe PSA Joint Venture dedicated to the design, development, manufacture and sale of electric traction motors.

Forty engineers have already been recruited and joined the JV headquarters in Carrières sous Poissy, near Paris. By end of summer, thirty more engineers are expecting to join this site where a dedicated R&D area has been created. They will design new traction electric motors to be produced in Tremery plant, Moselle area, in France, and integrated in Mild-hybrid (“MHEV”), Electric Vehicles (“EV”) and Plug-in Hybrid (“PHEV”) vehicles.

Both CEOs recognized the strategic importance of high-performance traction motor for electrified vehicles, and the two groups will invest 220 million euros to set-up this JV. This will support the electrification push, as 100% of Groupe PSA vehicle range will include an electrified offering by 2025.

Groupe PSA optimizes its manufacturing base in Europe

• Improving performance of powertrain plants to fulfil orders for future Opel/Vauxhall models based on PSA platforms
• Preparing manufacturing facilities for the ICE energy mix transition as well as the electrification push
• Localising automatic gearbox production to meet shifting customer demand

In order to step up its development and boost its competitiveness in Europe, the Group has decided to:

• Increase the agility of its manufacturing base by producing components as close as possible to car plants,
• Adapt its output to customer expectations, taking into account technological and energy shifts.

These changes are also an opportunity to adjust production capacity for Group engines as the manufacture of Opel/Vauxhall models is gradually ramped up on Groupe PSA platforms and fitted with Groupe PSA powertrains and technologies.

In light of the above, the Group has decided to make three adjustments:

• Increase production of the 3-cylinder Turbo PureTech petrol engine – awarded “Engine of the Year” in its category for three years in a row – as close as possible to car plants. In addition to doubling production capacity in France, compared to 2016, already in progress in Douvrin and Trémery plants, the Group will be producing PureTech engines in Tychy (Poland) and Szentgotthárd (Hungary) from 2019 onwards.
• Increase production of gearboxes from 2019 with the manufacture under license of automatic gearbox in Valenciennes (France), set to reach full potential by 2020, thanks to a strategic partnership signed with AISIN AW. Until now, this component has been manufactured in Japan and China. The Group will also invest to produce additional volumes of manual ML gearboxes in Metz-Borny (France) and MB6 gearboxes in Aspern (Austria), in particular to equip its high-end and light commercial vehicles and serve growing needs driven by production of Opel/Vauxhall cars.
• Prepare the Trémery plant (France) to produce electrical motors from 2019 onwards, before acceleration from 2021 onwards, thanks to the joint venture signed with Nidec. They will support the electrification push, as 100% of the Group’s vehicle range will include e an electrified offering by 2025.

These decisions have been made based on a performance assessment of manufacturing sites and in accordance with the New Momentum for Growth commitments signed in July 2016 by five out of six trade union organisations. The new production allocations also take into account what has been presented to employee representatives as part of the Opel/Vauxhall PACE! plan.

Yann Vincent, Executive Vice- President, Manufacturing and Supply Chain, said: “What will make the difference will be our agility to prepare our manufacturing base to produce components that meet customer needs and respond to the energy shift, creating the conditions for a sustainable future through enhanced performance. Groupe PSA’s 15 component production plants in Europe, located in France, Germany, Austria, Hungary and Poland, are eager to propose the best quality and performance to our customers.”

Groupe PSA and Nidec to set-up a leading joint venture for automotive electric traction motor

Groupe PSA and Nidec Corporation (the “Nidec”), through Nidec Leroy-Somer Holding (the“Nidec Leroy-Somer”), intend to work together in the field of electric traction motor. For this purpose, Nidec Leroy-Somer and Groupe PSA entered into a joint venture agreement on December 4, 2017. Closing of such transaction remains subject to antitrust clearance and employee representative consultation. Groupe PSA makes the strategic choice to anchor in France the design and production of the main components of the electric traction powertrain.

Nidec Leroy-Somer and Groupe PSA have acknowledged the strategic importance of traction motor in coming electrification age and agreed mutual cooperation for developing state of the art high-performance and competitive electric traction motor range for electrified vehicles (Mild-hybrid (MHEV), Electric Vehicles (“EV”) and Plug-in Hybrid (“PHEV”) to meet the needs of Groupe PSA and other OEMs.

The aim of the partnership is to design, develop, manufacture and sell a range of efficient electric traction machines. The joint venture will then engage R&D, manufacturing and sales for high-performance electric traction motor mainly to Groupe PSA, and to other OEMs, by combining PSA’s automotive OEM strengths and Nidec Leroy-Somer’s leading expertise of motor and related electrical equipment.

1.    Purpose and Background of the Transaction

As an anticipation of energy transition towards a cleaner mobility, electrification is the key to both solving global warming and controlling air quality with a well to wheel approach. Given the above trend, OEMs are accelerating their shift towards electrified vehicle technologies. Along with this trend, electrification of automobiles has been expanding and the market of electric motor for automotive is foreseen to double its size to JPY 6 trillion (€ 45 billion) in 2030. Nidec has been also active in this trend and developing products with its superior motor expertise.

Nidec has been actively developing a new growth platform with particular focus on automotive business. In its midterm strategic goal Vision 2020 it has targeted to achieve JPY 700 billion to 1 trillion (€ 5,4 to 7,6 billion) of sales in automotive sector in 2020.

Nidec Leroy-Somer, acquired by Nidec on February 2017, is the leading electric motor company in France serving all industry sector and renowned for its high quality products providing the best value to customers.

Groupe PSA, which is a European champion with the second position on the European market, has been actively accelerating its shift to electrified vehicles (MHEV, PHEV, EV). As part of the energy transition process and in line with the technological offensive spelled out in its “Push to Pass” strategic plan, Groupe PSA is focused on diversifying its technological offering with plug-in hybrid petrol engines and next-generation electric powertrains.

2.    Information on the joint venture:

Foundation:     1er quarter 2018, subject to closing
Headquarters:     Carrières sous Poissy, Paris region, France
R&D facilities:     Carrières sous Poissy, Paris region, France
Production facilities:     Trémery, Metz region, France
Shareholders:     50% Nidec Leroy-Somer Holding /50% Groupe PSA
Investment:     € 220 Million

3.    Effect on Financial Performance for the Current Fiscal Year

The Transaction is expected to have no significant impact on Nidec’s consolidated financial performance for the fiscal year ending March 31, 2018. Nidec will make additional disclosure on a timely basis in accordance with the rules of the Tokyo Stock Exchange upon determination of further details.