Abstract—This paper studies the permanent magnet eddy-current losses in an external rotor permanent magnet generator (PMG) used in diesel generator (DG) set application. An 18 stator slot 16 rotor pole PMG was designed and analyzed with surfacemounted radial magnets in exterior rotor configuration with NdFeB as the hard magnetic material. Permanent magnet (PM) segmentation technique was utilized for magnet eddy-current loss reduction i.e. the PMs were segmented circumferentially into two magnets per pole. Both the models i.e. with one magnet per pole and with two magnets per pole, were analyzed, fabricated and tested for performance. It is observed that there is considerable reduction in magnet eddy-current losses with two magnets per pole as the rotor magnets