Brembo: Rock Star of Brakes Expands Further

Brembo: Rock Star of Brakes Expands Further

By Michelle Krebs November 13, 2007

By Bill Visnic

NORTHVILLE, Mich. –- There is probably nothing less sexy than brakes. The gritty components that make up a typical disc-brake system are the antithesis of where most auto-industry suppliers want to be: brakes are low-tech, low-value commodity items. Hardly the stuff around which vaunted brands are built.

However, Brembo S.p.A., is the rock star of the brake business to the point that at one aftermarket trade show in France, we saw what amounted to a mini-riot among kids barely able to drive, when Brembo stopped handing out freebies and attempted to shut down its booth at the end of the day.

The fact the brake business even has a rock star is due entirely to Brembo’s existence. Almost since its inception in 1961, Brembo single-handedly has been responsible for making brakes cool (figuratively and literally).

Expanding Its Lead

Last week, Brembo North America Inc. completed the purchase of the Automotive Brake Components division of Hayes-Lemmerz International Inc. The division operates plants in Homer, Michigan, and Apodaca, Mexico, to manufacture brake discs and drums, and will augment existing Brembo North American manufacturing in Puebla, Mexico.

The $58-million acquisition gives Brembo an annual brake-rotor production of 7 million units to add to its global output of about 32 million brake rotors annually. Adrian Smith, general manager of Brembo North America, says the new production will continue to supply original-equipment contracts, as it did under Hayes-Lemmerz.

The deal makes the company far and away the world’s largest manufacturer of brake rotors. But Brembo didn’t need the newly acquired capacity to achieve the No. 1 spot: Brembo sources say the closest competitor is Daimler AG’s Mercedes-Benz unit, which annually produces about 8 million rotors –- one-fifth of Brembo’s output.

Building a Brand

But market dominance in volume is only half of Brembo’s success. Elevating its brand to rock star status is the other.

Brembo’s brand building took a major leap forward around 1975, suggests Smith, when Brembo accepted Ferrari’s S.p.A’s invitation to supply brakes for its Formula 1 racing team. That stamp of approval gave Brembo the performance credentials it has built into an empire in a business where most established suppliers –- including some of the industry’s biggest names, such as Continental, Bosch, Delphi –- have struggled just to hang on.

“It’s about passion,” says Smith, a United Kingdom native who oversees Brembo’s North American arm from a small office near here. He says Brembo’s long history of exceeding the expectations of the world’s revered performance- and racing-car manufacturers, as well as those automakers’ customers, has built Brembo into the empire it is today. The company has a presence in 12 countries and operates 23 production and business facilities.

He agrees the business of making “foundation” brake components -– including the disc-making production purchased from Kelsey Hayes -– is not the sort of thing that typically inspires auto enthusiasts. But he says Brembo’s experience with the high-performance braking for which it is famous translates perfectly to a business case for making foundation components with the same amount of precision and expertise.

In short, knocking out almost 40 million brake rotors that, for most, are no more worthy of notice than a wiper blade, doesn’t damage Brembo’s premium position with clued-in enthusiasts.

“We’re using the value of the brand,” he tells AutoObserver regarding the high-volume part of Brembo’s business. He says Brembo’s reputation for high manufacturing standards fits perfectly for expanding its position in the foundation-brake market, whether it be at the OEM, aftermarket or replacement-component level.

Brakes as Jewels

“The jewel in the crown of Brembo is its production facilities,” he says. “We’ve got control.” And that means Brembo typically can use its reputation to command more attractive margins than its competitors.

This part of Brembo’s business is not a secret, he says, although most enthusiasts, and certainly many auto-industry insiders, would not guess of the company’s commanding lead as a producer of commodity brake components. He says even in the market, Brembo reinforces its premium position -– every box or package prominently displays the Brembo name.

Smith says in addition to the passion imparted from the brand’s origins, that history also imparted a genuine performance reputation that only has become stronger, as makers such as Porsche, Ferrari –- and now even more mainstream Japanese and U.S. automakers –- commonly partner with Brembo to leverage the Italian company’s performance credibility. Have a vehicle that purports to be performance-oriented? You use Brembo brakes, no questions asked.

Finally, he says, Brembo has taken advantage of the market’s desire for improved aesthetics. Displaying the name of performance hardware has become an enthusiast staple.

“The product [painted brake calipers with Brembo’s name and logo] is almost jewelry,” he says.

Photo by Nissan

Nissan 350Z sporting Brembo brakes.

Michelle Krebs:  is Editor-in-Chief of AutoObserver.com. Follow @AutoObserver on Twitter.