Nd₂Fe₁₄B sintered magnets are used in the drive motors of hybrid, electric and other vehicles. A magnet in which rare earth content is reduced by means of a localized diffusion method has been developed in order to reduce the volume of dysprosium.The distribution of the demagnetization fields in a motor is not uniform, so the necessary coercivity distribution for the magnets was quantified using Computer-Aided Engineering (CAE). Then material specifications of the localized dysprosium diffusion satisfied with this coercivity distribution was determined, and optimal manufacturing conditions including the position of dysprosium diffusion were set. The coercivity distribution in every position of the magnet using localized diffusion method was inspected. As a result, the magnet was satisfied with coercivity distribution demanded by CAE.Furthermore, evaluation of motor characteristics, especially the demagnetizing characteristic concerned with dysprosium reduction, showed this developed magnet to possess identical characteristics to a conventional magnet.Dysprosium resources represent a particular issue among the rare earths more generally, and the technology developed in this project is able to reduce dysprosium use in magnets by approximately 30% without compromising motor performance.