Akebono Brake Industry Co., Ltd. Business Report FY ended Mar. 2016

Financial Overview

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 Rate of Change
Sales 281,341 254,157 10.7 -Achieved record-breaking sales in North America
-New business in China increased
-Increased caliper business in Europe
-Result of positive currency translation amounting to JPY 22.2 billion due to lower value of Japanese yen
Operating income (3,761) 4,004 - -Recorded operating loss due to production issues that arose in 2014 in North America
Ordinary income (6,815) 2,833 - -Affected by negative currency translation
Net income attributable to owners of the parent (19,462) (6,095) - -Recorded a loss in North America, especially due to an impairment loss for fixed assets at its production plant in Elizabeth Town, Kentucky
-Carried over reserves for improving business operations
-Recorded loss due to recall
Sales by Segment
-Japan 72,245 76,759 (5.9) -Recorded lower sales due to stagnant vehicle production
-Recorded lower sales of after-service products overseas
-North America 161,970 137,228 18.0 -Increased orders from OEMs
Result of positive currency translation, amounting to JPY 20.1 billion
-Europe 9,169 6,745 35.9 -Increased sales of products compliant with global platforms
-Increased sales of calipers for high-performance, mass-market models
-China 19,028 13,934 36.6 -Increased sales of products compliant with global platforms
-Increased business overall, including that with new customers
-Impacted by positive currency translation, amounting to JPY 2.0 billion
-Thailand 5,457 5,138 6.2 -Exports offset lower demand in Thailand.
-Increased sales of after-service products, especially for the Middle East
-Indonesia 13,471 14,352 (6.1) -Lower demand in Indonesia
-Year-end inventory adjustments by Japanese OEMs
-Lower sales to motorcycle OEMs

Restructuring North American Operation

-The Company will start restructuring of its production system in North America in FY ending Mar. 2017. The Company will also review the product lines produced at each plant and upgrade its production equipment with next-generation products in view. Since 2014, its plants in North America have experienced a sharp order increase, along with production troubles due to issues like equipment malfunction, and so the Company will first prepare a system where supply can be stabilized by making capital investments related to quality inspection. Once that is completed, the Company will establish a more profitable production system by reviewing the products produced at each plant and upgrading aging equipment. (From an article in the Nikkan Jidosha Shimbun on January 28, 2016)

Install product specific business divisions

-The Company will drastically reorganize its operations effective January 1, 2016. It will be reorganized into four divisions based on product categories, shifting from the current vertically segmented operations consisting of development, production, sales and other divisions. The reorganization is intended to delegate the authority and responsibility to each division, which is expected to improve business efficiency and boost the Company's global sales. Due to some problems at its North American operations since 2014, the Company is forecasting a second consecutive year of a net loss for this fiscal year ending in March 2016 despite growing demand. The new organization, which will facilitate communication between sales, development and other functions, the Company aims to enhance profitability and win new business. (From an article in the Nikkan Jidosha Shimbun on December 25, 2015)


-On April 1, 2016, the Company absorbed three wholly owned subsidiaries (Akebono Brake Industrial Machinery & Rolling Stock Component Sales Co.; APS Corporation; and Akebono Sensor Technology Co.), merging their operations into its own and becoming the surviving company.

Business Development

-The Company announced that its IT ground surface inclinometer system has been registered on the New Technology Information System (NETIS) introduced by Japan's Ministry of Land, Infrastructure, Transport and Tourism (MLIT). Inclinometer systems are used to measure tilt angles and surface deformations. The Company's inclinometers installed on different spots can be connected to a data logger with a single cable utilizing Controller Area Networks (CANs). This is the second time that the Company's product has been granted NETIS registration. The achievement is expected to expand the use of the inclinometer for road works and other applications, and is anticipated to triple the product's sales by 2018. (From an article in the Nikkan Jidosha Shimbun on March 22, 2016)

Outlook for FY ending Mar. 31, 2017

(in millions of JPY)
FY ending Mar. 31, 2017
FY ended Mar. 31, 2016
(Actual Results)
Rate of Change
Sales 271,300 281,341 (3.6)
Operating income 1,600 (3,761) -
Ordinary income 100 (6,815) -
Net income attributable to owners of the parent 200 (19,462) -

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

Mid-term Management Plan

-The Company announced its mid-term management plan, called "Global 30", which outlines long-term plans that are set to end at the close of fiscal year 2020, which ends in March 2021. Targets under the Plan is to raise the Company's global market share of disc brake pads sold to OEMs to 30% and operating margin to 10%.

-In order to achieve the objectives of Global 30, the Company ended the new mid-term management plan, called "akebono New Frontier 30 - 2013" that sets fiscal year 2015 (ending March 2016) as the final year. While the Company achieved its target of JPY 250.0 billion in sales, it missed its operating-profit target of JPY 20.0 billion by a wide margin. The business results are provided below.

1) Differentiate Company’s technology designed for the future

  • Launch business in the high-performance-brake segment
  • Set up global supply structure
  • Start delivering products that are environmentally compliant
  • Verify operational framework of R&D functions for electric-brake operations, while continuing R&D activities

2) Strive to radically lower costs and expand outside Japan

  • Consolidate brake-drum operations by transferring operations from Iwatsuki Works in Saitama Prefecture to the Sanyo Plant in Okayama Prefecture.
  • In expanding operations in North America, production issues arose because of inability to cope with a sudden increase in demand, so streamlining came to a stop.

3) Speed up global operations by migrating from focus on “Japan-USA” to “Japan, USA, Europe, and Asia”

  • Hire more globally capable human resources
  • Established production plant in Slovakia in 2015, which launched commercial operations. This is following the launch of plants in Vietnam and Mexico.

-The Company has established its new mid-term business plan "akebono New Frontier 30 - 2016," which covers the three year period until fiscal year 2018 (ends in March 2019). Under the new plan, The Company aims at getting back into the black, from an operating loss of JPY 3.8 billion recorded in FY 2015 to a FY 2018 consolidated operating income of JPY 10.0 billion. The Company aims to rebuild its North American operations by taking drastic measures centered on organizational reform in order to make North America a pillar of revenue. In addition, the Company will set up product specific business divisions to enhance the profitability of each product and enhance its global competitiveness. The new plan's goal is to facilitate sustainable growth, rather than focusing on expanding sales. The goals of the mid-term plan include rebuilding North American operations, establishing global networks through installation of product specific business divisions, expanding HP (high performance) business, and creating new businesses in Europe. Through achieving these goals, the Company aims to develop new business fields and strengthen its business foundation. (From an article in the Nikkan Jidosha Shimbun on May 26, 2016)

New Mid-term Management Plan "akebono New Frontier 30 - 2016"

1) Rebuild North American Operations

Rebuild Akebono Brake Corporation (ABC) foundation

-Strengthened management and organizational improvements led by ABC

Stronger cost management -Shift from emphasis on sales to profitability
-Necessary adjustments to sales and purchasing prices
Increase productivity

-Utilization of Mexico Plant
-Stability in quality and elimination of expedited freight, with safety as top priority

2) Install product specific business divisions for a global network
  1. Establish product specific business units responsible for sales, R&D and other critical functions
Business unit

HP (High Performance)

HP disc brakes, brake pads

With Europe as the center, increase market share through competitiveness in performance and cost

Foundation brakes Disc brakes, drum brakes, mechanical parts Global expansion, with augmented safety and quality. Maintain profitability and product volume.
Infrastructure and Mobility

Industrial, rolling stock and sensor products

New business and increased sales through technological innovation and combined technologies


Brake pads, lining

Increase competitiveness through the Company's strengths in raw material and NVH technologies (NVH = Noise, Vibration and Harshness)
Aftermarket Service parts Increase global profitability in emerging markets and niche markets
  2. Establish a global strategy through enhanced regional marketing functions
  3. Carry out a global product strategy based on the concept of standardization and enhanced product features (standardized products in addition to custom "toppings"or S+t)
  4. Rationalization achieved through global purchasing activities
3) Expand HP (High Performance) business and create new businesses in Europe

  1. Incorporate high performance technologies into mass production models to create unique products with added value
   :Currently producing high performance 6 pot brake caliper. Introducing world’s first mass produced 10 pot caliper.

  2. Establish full scale high performance aluminum caliper production operations at Slovakia plant

Numerical Targets (in 100 millions of JPY)
- New Mid-term Management Plan Long-term vision
FY ended Mar. 31, 2016
(Actual Results)
FY ended Mar. 31, 2017
FY ended Mar. 31, 2018
FY ended Mar. 31, 2019
FY ended Mar. 31, 2021
Sales 2,813 2,713 2,650 2,550 -
Operating income (38) 16 80 100 -
Operating margin (%) - 0.6 3.0 3.9 10
Net income attributable to owners of the parent (195) 2 30 50 -
Market share of Global OEM disc-brake pads - - - - 30%


-The Company announced that its front brake pads and rear brake pads have been chosen for installation on the new Toyota "Prius". (From a press release on January 26, 2016)

R&D Expenditure

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Overall 1,941 1,615 2,338

R&D Structure

Name Location Remark
Development division Hanyu, Saitama Pref. -
Ai-Ring (Test Course) Iwaki, Fukushima Pref. -Largest-scale test course in Japan among domestic auto-parts suppliers' facilities
-Test and evaluation center of brakes using the test course
Akebono Research & Development Centre Ltd. Hanyu, Saitama Pref.

-Development of new material

  • Microminiaturized, lightweight brakes
  • Low environmental burden friction materials
  • Alternative to scarce materials

-Expanding into new fields

  • Development of proprietary materials
  • Development of energy-saving technologies
  • New technologies in value-added product manufacturing such as surface finishing technology
Akebono Advanced Engineering Co., Ltd. Hanyu, Saitama Pref. -Development of high performance brake system
North America
Akebono Engineering Center Michigan, USA -
Akebono Europe S.A.S. Gonesse, France -
Akebono Engineering Center, Europe S.A.S. Bezannes, France -Development of foundation brakes
Akebono Advanced Engineering (UK) Ltd. Wokingham, UK -Development of disc brakes designed for motor sports and for high performance vehicles
Akebono Europe GmbH Germany, Hessen -Development of disc brakes
China Technical Center - -Established in January 2011.
Thailand brake development location - -Established in January 2014.
-Development of brakes for ASEAN market

-The Company plans to triple the number of its sales and development staff to over 150 by 2020. This is part of the Company's initiative to win new business from European OEMs and thereby increase its presence in the market. In August 2015, the Company began local assembly of high-performance brake calipers for European customers at its new plant in Slovakia. (From an article in the Nikkan Jidosha Shimbun on October 5, 2015)

R&D Activities

-Develop new technologies, which include new friction materials for various brake systems and next-generation brakes by utilizing the Company's expertise in the areas of friction and vibration and their analysis and control technologies.
-Acquire greater expertise in the areas of noise and vibration and develop new technologies based on the Company's sharing and standardizing initiatives. Development projects include green materials and other environmental technologies to reduce drag and cut product weight.
-Develop technology, such as that on electric-brakes, that is capable of being applied to autonomous driving; and develop bakes for high-performance vehicles.

Friction materials for brakes
-Develop new copper free friction materials that comply with recently enacted environmental regulations on friction materials in several U.S. states, including Washington.
-Development of high-quality products (mainly high-performance brake-pads for passenger cars and low-cost brake-pads) that provide superior performance in terms of noise and vibration, and which reduce wheel dust (a phenomenon that has recently become the focus of attention), and which use safe frictional materials that take environmental concerns into account.

Disc brakes/drum brakes
-Work on developing brakes that are designed for high-performance vehicles, that are environmentally friendly, and that can be applied to autonomous driving.
-In developing aluminum alloy opposed-piston brakes for high-performance vehicles, apply technology gained from developing brakes for F1 racing cars and work on commercializing them.

Electrified technology

-Electric brakes that can be controlled by electric signals coming from small electric motors placed in the brakes.
-Development of technology on electric parking systems in which only the parking function has been electrified.

-Development of friction materials that meet strict, environmental regulations in Europe.
-Development of hybrid materials, incorporating characteristics suited to both the quiet-running cars preferred by the Japanese and U.S markets and the high performance vehicles popular in the European market.

Friction materials
-Develop and produce new products through local procurement and local production to best meet the needs of emerging markets in terms of both cost and performances.

Disc brakes
-Research and analysis on market needs and how products are being used, to develop products that can be delivered at low cost but which still provide needed features and performance

Product Development

Aluminum brake caliper for compact vehicles
-The Company will develop aluminum brake calipers for compact vehicles. The aluminum products are expected to help automakers reduce the weight of the underbody. The Company will promote the new brake calipers to Japanese OEMs, aiming to start supplying them around 2019. Aluminum calipers are currently used mainly in luxury vehicles. The Company will differentiate its new calipers from such existing products, aiming to win new orders for installation on mass-produced vehicles. (From an article in the Nikkan Jidosha Shimbun on January 12, 2016)

Next-generation friction material
-The Company is planning to develop a next-generation friction material by 2018. The Company intends to fundamentally rethink its existing products in terms of their raw materials and compounding ratio. The new friction material will offer a high level of braking performance and reduced brake squeal and brake dust, while also conforming with copper regulations. The Company currently provides steel fiber-free non-asbestos organic (NAO) friction materials and low-steel friction materials according to customer requirements. By developing value-added products that combine these materials' respective advantages, the Company aims to cultivate new markets such as the premium car market. (From an article in the Nikkan Jidosha Shimbun on November 19, 2015)

10-pot opposed aluminum monoblock brake caliper
-The Company announced that it has developed a 10-pot opposed aluminum monoblock brake caliper for high-performance production vehicles. Due to the 10-pot design, the new caliper can be used in large SUVs, which need large brake pads to absorb high-load braking energy, and can provide stable braking performance. (From a press release on October 28, 2015)

Next generation brake caliper (standardized, commonized)
-The Company plans to develop a new brake caliper design that can be shared among different vehicle models. Conventionally, brake calipers were developed specifically for each model, but the Company has decided to create a standard design, which will enable the use of commonized parts and same machining methods regardless of models. Standardizing caliper designs is expected to boost production efficiency and cut costs. The new design is also intended to reduce product weight and improve product performances. For a European automaker, the Company already developed and supplies high-performance brake calipers based on a design intended for sharing among various models. By utilizing the expertise it gained in the development process, the Company aims to develop a next-generation design by the fiscal year ending March 2019. (From an article in the Nikkan Jidosha Shimbun on September 17, 2015)

Capital Expenditure

(in millions of JPY)
FY ended Mar. 31, 2016 FY ended Mar. 31, 2015 FY ended Mar. 31, 2014
Total 18,568 20,800 21,800

-The Company invested the following amounts in facilities and equipment in its global operations: Japan: JPY 4.4 billion, North America: JPY 8.1 billion, Europe: JPY 1.2 billion, Indonesia: JPY 1.0 billion, China JPY 1.3 billion, and Thailand: JPY 2.5 billion.

-Major investment projects are as follows:

  • Japan: Improve productivity of disc brakes, rebuilding producing operations.
  • North America: Facilities to produce products for new models and to meet growth in demand
  • Europe: Facilities and equipment for producing brakes designed for high-performance, mass-market models.
  • Indonesia, Thailand, China: Facilities to meet growth in demand

-Capital expenditure for FY ending Mar. 2017 is planned to be JPY 15 billion.

Investment Outside Japan

-The Company announced that it has held an opening ceremony for Akebono Brake Slovakia s.r.o. (ABSK), a new subsidiary to manufacture brake calipers in Trencin, Slovakia. Mass production is scheduled to start in August 2015. ABSK will initially assemble cast iron brake calipers, and plans to install new equipment to produce aluminum brake calipers for high-performance vehicles in the future. The subsidiary hopes to generate EUR 58 million sales from European automakers by 2017. ABSK has a land area of approximately 42,000 square meters and a floor area of approximately 12,000 square meters. The Company currently manufactures disc brake pads at its French subsidiary, Akebono Europe S.A.S. The establishment of the new Slovakian plant will allow the Company to establish an integrated production structure in Europe. (From a press release on June 24, 2015)

Planned Capital Investments

(As of Mar. 31, 2016)
Facilities & Activities Total investment (millions of yen) Start date Completion
Headquarters and other facilities
(Tokyo, Japan)
Preserving the environment, saving energy, and installing new production-equipment and information systems. 720 Apr. 2016 Mar. 2017
Development division
(Saitama Pref., Japan)
Testing and R&D facilities, electric brake development facilities 1,590 Apr. 2016 Mar. 2017
Akebono Brake Iwatsuki Manufacturing Co., Ltd.
(Saitama Pref., Japan)
Manufacturing facilities of disc brakes and drum brakes 350 Apr. 2016 Mar. 2017
Akebono Brake Fukushima Manufacturing Co., Ltd.
(Fukushima Pref., Japan)
Manufacturing facilities of brake linings, industrial machinery, and railway products 210 Apr. 2016 Mar. 2017
Akebono Brake Yamagata Manufacturing Co., Ltd.
(Yamagata Pref., Japan)
Manufacturing facilities of disc brake pads 360 Apr. 2016 Mar. 2017
Akebono Brake Sanyo Manufacturing Co., Ltd.
(Okayama Pref., Japan)
Manufacturing facilities of disc brakes and drum brakes 70 Apr. 2016 Mar. 2017
Akebono Research & Development Center Ltd.
(Saitama Pref., Japan)
Testing and R&D facilities 30 Apr. 2016 Mar. 2017
Akebono Brake Corporation
(Michigan, USA and others)
Facilities to conduct R&D activities, and manufacture disc brakes, drum brakes, and disc brake pads 6,080 Jan. 2016 Dec. 2016
Akebono Brake Mexico S.A. de C.V.
(Guanajuato, Mexico)
Manufacturing facilities of disc brakes and drum brakes 120 Jan. 2016 Dec. 2016
Akebono Europe S.A.S.
(Gonesse, France and others)
R&D facilities, production facilities of disc brake pads 410 Apr. 2016 Mar. 2017
Akebono Engineering Center, Europe S.A.S.
(Bezannes, France)
R&D facilities 50 Apr. 2016 Mar. 2017
Akebono Brake Slovakia s.r.o.
(Trenčín, Slovakia)
Plant for manufacturing disc brakes 1,000 Apr. 2016 Mar. 2017
Akebono Corporation (Suzhou)
(Suzhou, China)
Manufacturing facilities of disc brake pads 1,300 Jan. 2016 Dec. 2016
Akebono Corporation (Guangzhou)
(Guangzhou, China)
Manufacturing facilities of disc brakes and drum brakes 1,070 Jan. 2016 Dec. 2016
PT. Akebono Brake Astra Indonesia
(Jakarta, Indonesia)
Manufacturing facilities of disc brakes and brake parts 830 Jan. 2016 Dec. 2016
Akebono Brake Astra Vietnam Co., Ltd.
(Ha Noi, Vietnam)
Manufacturing facilities of disc brakes and master cylinders 290 Jan. 2016 Dec. 2016
Akebono Brake (Thailand) Co., Ltd.
(Chonburi, Thailand)
Manufacturing facilities of disc brakes 340 Jan. 2016 Dec. 2016
A&M Casting (Thailand) Co., Ltd.
(Ratchaburi, Thailand)
Manufacturing facilities of cast-iron automotive components 180 Jan. 2016 Dec. 2016