Major stopping power: How do you grow a foundation brake component supplier in the age of modules? Akebono's CEO explains - Trends: Management Q&A - Brief Article

Automotive Industries,  March, 2002  by Lindsay Brooke

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Calipers and friction materials are the cornerstone of automotive braking systems -- and of Akebono Brake Industry Co.'s business. The venerable Japanese supplier studied the module movement and chose to remain a component specialist, selling to automakers and brake-systems Tier is. Akebono dominates the OEM friction pad market, with over 40 percent share in Japan and roughly 28 percent share in North America.

Over 80 percent of the company's North American business is with Delphi, Bosch, Continental-Teves and TRW. Most of its OEM business is with General Motors.

Bulletproof product quality is an Akebono calling card. Its lean production system boasts external PPM numbers that are virtually immeasurable -- a claim that's supported by consistently placing on J.D. Power's Top-10 brake-systems Customer Satisfaction list. But new technologies are also part of Chairman and CEO Hisataka "Chuck" Nobumoto's strategies. He outlined them recently at Akebono's North American tech center in Farmington Hills, Mich.

Q: Where will your company's projected 3.5 percent growth this year come from?

A: We have a big market in front of us. There is big opportunity in Europe, where we have only one percent share in friction material. In Europe, high-speed brake performance is most important; brake noise and vibration is not very important. My target is to sell the European DEMs on high-speed performance plus the NVH solutions.

Q: Have brake pads become commodities in today's on-line purchasing environment?

A: No. Less than five percent of brakes are quoted online. Because of our product's relationship to NVH performance, and its impact on customer quality and J.D. Power ratings, we are not viewed as a commodity.

Q: What new technologies is Akebono working on?

A: We have many. We're launching a program with a rear integral parking brake. It's a new type of technology. We will shortly launch some initiatives at doing drum brakes totally differently; we can cut costs 50 percent. Drums are very simple and effective. In terms of cost, and even including the parking brake drum brakes are cheaper.

Aluminum calipers are another opportunity for us.

Q: What about brake by-wire?

A: We are studying it If you do not utilize hydraulics, you need to have an electric motor that's smaller and stronger and more efficient And we haven't found one at reasonable cost yet.

Q: And metal-matrix composite rotors?

A: We are developing the MMC rotor in Japan, and the friction materials to go with it

Q: What's the D50 caliper project?

A: It's a frame-type caliper we're working on with one of our North American customers. It's a high-performance caliper. The concept is to take multiple components and minimize them into one. It reduces manufacturing steps and cost.

Q: What is Akebono's technology direction?

A: Our core technology is friction materials. There are many opportunities in control and analysis sensors--for ABS, engine and airbag control. We have exclusive Japan-market OE sales and marketing agreements with Viasala Technology Inc. (VTI) of Finland and BEI, from San Francisco. We import the sensor products then assemble, test and assure the quality, and develop the usage. We don't do the unit manufacturing. Now we are proposing a combined sensor from these two companies for the Japanese OE market

Q: What's the next step for your already ultra-lean manufacturing process?

A: Our goal is to make one part, change tools, make another part, change tools, etc., without any disruption of production.

Q: Brembo has successfully built a high-end "boutique" caliper brand. Will Akebono respond?

A: Increasing our brand recognition is very important We want people to think of high quality and performance when they think Akebono. At the last Frankfurt show we displayed sixpot, eight-pot and opposed-piston type calipers. They are beautifully designed for Ferrari and Honda S2000. We will also be introducing disc-brake calipers for mountain bikes and motorcycles. People tell me they are getting tired of Brembo!

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