Foreign Auto Suppliers Exiting China Are No Victims


The steady drumbeat of automakers and suppliers cutting their presence in China is almost enough to inspire pity. There’s no need. Strategic reductions, including last week’s announcement by a major Japanese parts maker, are a sign of pragmatism and an acknowledgement that the world’s largest car market isn’t necessarily a profitable one.

Nidec Corp., which makes motors used in power steering systems and electric drive trains, said it would recognize a restructuring expense as it restarts the China strategy to cut costs and limit unprofitable orders. The company slashed its full-year operating income forecast by 18% as a result. Nidec isn’t withdrawing completely, and instead will shift to localizing product development and procurement.



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