2009 China brake pad parts industry report

Brake pads, brake shoes, brake discs and brake drums are the main products for the export of brake components in China, accounting for more than half of the total exports. Other export products include brake pads, brake pads, brake calipers, friction linings and a complete brake system.

The products are designed according to the requirements of different car manufacturers and different types of brakes, including passenger cars, trucks and buses for the first-class car manufacturers in the US, Japan, Korea and Europe. There are also products designed for different terrains and driving conditions.

The price of brake components under an OEM or OES contract is at least 20% higher than the replacement product. Because of the need to meet higher performance requirements, as well as strict standards that vary from car manufacturer to manufacturer. Therefore, manufacturers who do OEM or OES business usually need to adopt more advanced technology and higher level production technology. Some large domestic manufacturers have separate venues for the production of OEM and OES orders.

The replacement products are mostly designed for medium and low-end vehicles, and the corresponding prices are also cheaper. One of the few manufacturers that supply high-end vehicles is also a large-scale company with a good reputation for its own brands.

Brake pads and brake shoes
Brake pads and brake shoes, consisting of friction material or brake lining. They are bonded or fixed to the steel plate with rivets. Suppliers often refer to this entire system as a brake block and sell four sets of products for use as front/rear brakes.

Most of the brake pads and brake shoes produced in China are designed for light-duty vehicles such as passenger cars and vans. Applicable to heavy-duty vehicles such as trucks and buses, only a few manufacturers with advanced technology have the ability to provide.

Qingdao Meisu Import & Export Co., Ltd. entered the brake pad production industry two years ago and recently launched a large-scale product designed for branded trucks such as Mercedes-Ben (Z Mercedes-Benz) and Volvo (Volvo).

Brake pads and brake shoes can be divided into two categories according to whether the friction material has asbestos composition. The latter is further divided into semi-metallic and non-asbestos organics (known in the industry as NAO, including ceramic components).

Asbestos brake pads/hoofs are traditionally the largest in the field, with production accounting for more than half of the entire product category five years ago, but this ratio has now fallen below 40%. Because there are regulations in several overseas markets, such as domestic and European and American, the use of asbestos brake pads and brake shoes is restricted. In addition, asbestos brake pads and brake shoes are no longer used in the models recently introduced by several car manufacturers. Therefore, alternative parts also have to be made without asbestos. However, due to the low price, asbestos brake pads and brake shoes are still popular in some markets, such as the Middle East and Africa. Asbestos brake pads / brake shoes can be priced as low as $4.

In the asbestos-free segment, semi-metallic products are mainstream products. Its products are 10% to 20% higher than asbestos brake pads/hoof, and prices range from less than $4 to more than $10. Friction materials for semi-metallic brake pads/hoofs typically include 7/8 components. It includes steel wool, iron powder and other metal materials bonded by resin. Due to the high metal content, the products have high friction coefficient and good thermal stability. But compared to other types of products, the brake disc/drum is faster and the noise is louder.

Non-asbestos organic brake pads/hoofs are the second largest category of asbestos free products. The lining contains about 17 raw materials, of which glass, carbon and aramid or aramid fibers are most common. Non-asbestos organic brake pads/hoofs are comparable in price to semi-metallic brake pads and brake shoes, but with less noise and, due to the softer texture, wear on brake discs and brake drums is slower. Non-asbestos organic brake pads/hoofs are only suitable for light duty tasks such as low speed cars or vehicles that are only used for smooth road conditions. Because at present, most of the domestic non-asbestos friction materials formula can not be compared with semi-metal products in terms of wear rate, response to severe driving conditions and high-speed driving performance.

Products using ceramic friction materials are also available. This type of NAO lining contains a large amount of ceramic fiber, its composition is more complicated than other NAO materials such as semi-metal, as many as 18 to 20, so its use is only limited to a few high-end product suppliers. The price of this type of product is more than 6 US dollars, which is 10% to 20% higher than other brake pad products.

In the coming months, the production of ceramic brake pads and brake shoes in China will increase. Manufacturers regard this as a high-growth product, mainly due to the increasing use of new models, especially luxury cars and high-performance models. Ceramic brake pads and brake shoes are becoming more popular due to the combination of NAO and semi-metal products. First of all, like semi-metallic products, it is resistant to high temperatures and slow degradation. Second, like NAO products, it is less noisy and wears less on the rotor and brake drum. In addition, ceramic brake pads and brake shoes produce less dust and are too light to be noticed. Domestic manufacturers usually offer 3-4 raw material ingredients.

Brake disc and brake drum
The brake discs and brake drums of Chinese suppliers are usually sold separately, and the price depends on the materials used. There are many types of raw materials used, including cast iron, steel and alloys, most of which are sourced from domestic sources.

The price of cast iron products is below US$6, accounting for 40% to 50% of the total output of Chinese brake discs and brake drums. Highly specialized products for up to $150 are also available. Most manufacturers prefer cast iron, especially for medium to low speed products. Because of the low price of cast iron, thermal stability and mechanical processing performance are good.

Followed by steel or alloy steel products, accounting for about 30% to 35% of the total output, mostly for medium and high speed vehicle design. Its price is between 6 and 15 US dollars, about 50% higher than cast iron products, mainly due to higher raw material costs.

Brake discs and brake drums for composite materials account for less than 5% of total production, mainly for luxury models in the high-end market, as well as high-performance vehicles such as sports cars and racing cars. The unit price is more than 15 US dollars, which is more expensive than steel and steel alloy products because the production technology costs more. Domestic brake discs and brake drums are more widely used in carbon-carbon and carbon ceramic composites. These products are lighter than cast iron or steel brake discs/drums, have better corrosion resistance and are more resistant to high temperatures. Its service life is about four times that of the latter.

The carbon-carbon material is made of carbon-based carbon fiber and weighs only half of the traditional raw material, but still works well above 300 degrees Celsius. The carbon-ceramic brake disc/drum is made of carbon fiber in a silicon carbide base. It is about 60% lighter than traditional raw materials and can withstand temperatures up to 1000 degrees Celsius.

In China, the design is also a major factor in determining the price of the brake disc/drum. As the aesthetic value of alternative products becomes more and more important, suppliers are working hard to match the design to the needs of various models. For example, some domestic manufacturers are already producing brake discs with drilled or slotted patterns, which are in keeping with the open design wheels. In addition, the drilled or slotted pattern enhances product functionality: the pattern reduces product weight, makes the brake disc easier to handle, and allows air to escape between the brake disc and the brake pad.

Most manufacturers with drilled or slotted brake discs have large production scales and target the high-end market. Due to the advanced technology required in production, the unit price is about 20% higher than that of ordinary models. Therefore, products made in China are still based on physical design.

Raw material procurement is mostly done locally
China's brake component suppliers typically use 70% to 80% of the cost to obtain fiber and metal materials because the performance of the product is highly dependent on the materials used.

Raw material procurement is usually carried out in China, especially for brake disc and brake drum manufacturers, and only a small amount of imported raw materials are required at the customer's request.

This is mainly to save the related costs incurred in purchasing. This is especially important for the industry, especially in the context of recent fluctuations in raw material costs. From the second half of 2006 to the beginning of 2007, the cost of cast iron, cold/hot rolled steel fell by 15%, but then rebounded by 14% to 16%.

In addition, the development of China's metal forging industry is perfect, which also makes the brake component manufacturers' demand for steel well satisfied. China's largest steel casting enterprises are located in Shanghai, Chongqing, Baotou, Inner Mongolia, and Liaoning, Zhejiang and other places. Adjacent to these steel companies, large brake component manufacturers are sourcing raw materials locally. Small manufacturers and distant manufacturers are sourcing from local distributors.

Imported raw materials include various organic and inorganic fibers used as brake linings, mainly for brake pads and brake shoes. The most common of these are aramid fibers, such as Kevlar imported directly from DuPont, USA, and Twaron from Teijin Aramid, Norway.

Manufacturers of imported fiber raw materials usually provide medium and high-end products. Although the supply is not sufficient (especially Kevlar), such companies still prefer imported materials. Because compared with foreign suppliers, China's raw material suppliers are still lacking in production experience.

Note: All quotes in this report are in US dollars unless otherwise stated. The FOB price provided is the reference price at which each company was surveyed and may have changed.

Europ Fence/Holland Fence

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