Nidec Shares Plunge After Quality Inspection Misconduct Allegations

Nidec Corp (TYO:6594) shares tumbled sharply on Wednesday after the Japanese motor manufacturer confirmed suspected improper conduct related to product quality inspections. The company’s stock dropped as much as 18% to 2,329 yen, significantly underperforming the broader Nikkei 225 index, which posted modest gains during the session.

The sharp decline followed a company statement acknowledging that it had uncovered possible unauthorized changes involving materials, manufacturing processes, and product designs without obtaining customer approval. Nidec stated that the suspected misconduct affected certain products and may have violated internal compliance standards.

Despite the announcement, the company emphasized that no immediate issues affecting product safety or functionality had been identified. Nidec also revealed that it is considering establishing an independent investigation committee to further examine the allegations and determine the full scope of the issue.

The disclosure came shortly after a Nikkei Asia report claimed that Nidec had been involved in quality tampering in more than 1,000 separate cases. The report intensified investor concerns surrounding the company’s governance and operational oversight.

The latest controversy adds to growing pressure on Nidec, which has already been dealing with accounting-related problems. In April, the company disclosed that revisions to its financial reporting between 2020 and 2025 would reduce net profit by approximately 160.7 billion yen, or about $1.01 billion. Previous concerns were largely tied to accounting practices, but the new allegations raise questions about the integrity of Nidec’s manufacturing and quality control systems.

Investors are now closely watching how the company responds to the allegations and whether further investigations could impact customer trust, production operations, or future earnings. The ongoing developments have also increased scrutiny on corporate governance standards within Japan’s manufacturing sector.