“Friction” is the term used in this report to include various technologies related to reducing the speed of or stopping moving vehicles using abrasive mechanisms. Numerous approaches based on composite materials, mechanical means and electronic controls are used to achieve the end result of stopping moving vehicles by converting the kinetic energy into various other forms of energy, which are mostly lost and never recovered. In this report, the choice of the top 10 companies is accomplished by considering as the primary criteria the manufacturers of brake pads and linings, which are the wearable components in the braking system.
This focused document profiles the top 10 companies of this industry globally, and provides comments on several upcoming transformative changes happening in the field. The definition of the industry is broadened somewhat to include tightly interconnected products, technologies and industries, including sections and segments of the clutch industry and the brake systems industry.
The field of “Friction” is a complex web of players, with automakers still footing the liabilities for malfunctioning of the brakes, as the product cost of the friction component is marginal compared to the cost of the braking system and the vehicle itself. This symbiotic relationship between the vehicle manufacturer, the brake system manufacturer and the friction material manufacturer has, over the years, created a system of checks and balances, where the vehicle manufacturer has a tight and ever increasing set of technical benchmarks that the brake system provider and the friction material provider have to meet; often times these testing requirements run into several hundreds of tests which can take years just to simply complete—forget iterations needed to fine tune the product; and the brake system provider and the friction material manufacturer together are required to routinely add to their R&D capabilities of testing, reporting and production controls. This system also necessitates the friction material manufacturer to continuously push their supply chain companies to tightly control their production systems and reporting requirements.
An offshoot of this relationship is the consolidation of various segments in the industry over the years, a process that is expected to continue in the coming years and decades. Another interesting outcome is the growth of small and niche companies that have developed unique materials, material solutions, manufacturing equipment and testing equipment to the industry, which have, in retrospect, been accepted by a wide spectrum of the companies in the industry. Such companies command higher profit margins in this industry.
Over the past few years, prices have fluctuated widely for various commodities and this has impacted the industry deeply. Companies have attempted to absorb the increasing prices of materials and labor in a bid to remain cost competitive, but have recently been forced to pass on higher costs to their customers. The trend of moving manufacturing to low cost countries is also an ongoing process in this industry, as is in several other industries.
The friction market worldwide is estimated to be about $10 billion in revenues. There is no worldwide player commanding more than 20% of the market. This is mainly attributed to the lack of globalization in the industry. There is still a significant divide between the western (U.S. and Europe) and eastern (mainly Japanese) companies with no major collaborations. Recently, Nisshinbo has acquired TMD and this is the biggest step in this direction. However, even with the acquisition, their market share is only about 15% globally.
The friction market is largest for the passenger car market, as the vehicle production and vehicles on the road are highest in this segment. Second largest segment is commercial vehicles. Smaller segments are railways, aircraft and industrial. In the passenger car segment, the largest portion is disc brake pads, followed by drum brake linings. In commercial vehicle segment, drum brakes with linings are used more widely—both in North America and Asia, while Europe uses disc pad brakes. Railway segment is largely brake blocks, with a small segment using brake pads. Industrial uses a mix of various product technologies.
Material wise, for passenger car disc pads, there are three main technologies being used. These are NAO / ceramic / hybrid; semi-metallic; and low-metallic. In North America, two thirds of the market is the first type, with semi-metallic being used in most other applications. Low mets are rarely used in North America. In Europe, majority of the products are low mets, with smaller percentages of hybrid and semi-met grades used. Asia pacific uses majority hybrid materials, with the rest split about 50-50 between semi-metallic and low metallic grades.
STUDY GOAL AND OBJECTIVES
This document is a specialty report related to the BCC Research report Global Markets for Friction Products and Materials, Report number AVM028E authored by Andrew McWilliams. The goal of this document is to provide a more in-depth look at the top tier companies in the friction industry and some look at the second tier of companies and any changing and current trends in the friction industry.
The objectives include identifying companies that are considered the leaders and what technologies or management contributions make them leaders. There are certain market drivers and some constraints to both the companies and to the evolving technology they seek to dominate. There is a desire to ascertain if these companies will be able to meet the continuing demand for their products by proprietary technology, strategy alliances, superior marketing or other sought for advantages.
Most of the information presented in this report is based on information available from annual reports, various regulatory filings, the company itself, U.S. patent office and such public sources. Additional information was sourced from industry experts and people with close understanding of the industry dynamics.
This report is intended especially for customers and suppliers of friction technologies and products, and others with a need to understand the status and dynamics of the market for these products. This report is largely nontechnical in nature and coverage. It is concerned less with theory and jargon than with what works, who the major global players are, what technological trends are seen in the market place and which intellectual properties and regulations are shaping the market.
As such, the report’s main audience is executive management personnel and marketing and financial analysts. It is not written specifically for scientists and technologists, although its findings concern the market for their work and include the availability of government and corporate research funding for different technologies and applications, which should interest them. Since this is a field with very limited university R&D, most of the technology is corporate owned in terms of patents, trademarks, copyrights, and so forth.
The scope of this report is focused on a select 10 companies in the friction industry. This is in many ways a selected due diligence of the key companies and drivers in the friction industry marketplace.
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The information developed in this report is intended to be as reliable as possible at the time of publication and of a professional nature. This information does not constitute managerial, legal or accounting advice, nor should it serve as a corporate policy guide, laboratory manual or an endorsement of any product, as much of the information is of a speculative in nature. The author assumes no responsibility for any loss or damage that might result from reliance on the reported information or from its use.