Major precision motor manufacturer Nidec Corp. said Tuesday it will set up a joint venture March 1 with five of its group companies in China to manufacture components for computer systems.

The move is aimed at enhancing competition by reducing labor costs and costs for procuring materials, the company said.

The new company, Nidec System Engineering (Zhejiang) Corp., will initially be capitalized at $5 million and will be located in Pinghu, Zhejiang Province, it said.

The new company will be owned 30 percent each by Nidec and Nidec Copal Corp., 15 percent by Nidec Tosok Corp., 10 percent each by Nidec-Kyori Corp. and Nidec Machinery Corp. and 5 percent by Nidec-Read Corp., Nidec said in a statement.

The new company hopes to see sales of 1.9 billion yen in fiscal 2002 and 15 billion yen in fiscal 2005.

Its initial workforce will number 250, but will later be expanded to around 1,000 in line with increased production, the company said.