TEZZANO, Italy — Few suppliers have constantly grown their business like the Italian brake maker Brembo.
In the first half of 2018, the company reported revenue of about $1.5 billion, up 6.1 percent from the same period in 2017, and increased net profit 2.5 percent to the equivalent of $160 million.
Auto business accounts for nearly three-quarters of that revenue, with the remaining 30 percent split among motorcycles, racing and aftermarket/commercial vehicles.
Brembo is still relatively small compared with brake giants such as Robert Bosch or Continental. But Brembo Executive Deputy Chairman Matteo Tiraboschi, 51, believes this can be an advantage — even though he knows Brembo needs to grow, he told Automotive News Europe Editor Luca Ciferri and Correspondent Andrea Malan during an interview at the supplier's headquarters here.
Q: Does Brembo feel at a disadvantage as a specialized company that must fight against diversified giants?
A: Their diversified offering is an advantage. But as the smaller company, we are quicker and more focused.
Does Brembo need to grow?
We have to grow. Globally, we are small. We have to double our sales to €5 billion ($5.67 billion) per year.
Family-owned companies such as Brembo think longer term. How far into the future does Brembo look?
We have a structured three-year plan that projects results up to five years. Beyond five years, we have guidelines. But it's difficult to get into too much detail, not least because our customers have a hard time forecasting their business over that time frame.
Would it make sense for Brembo to diversify its product portfolio?
We bought the seat belt maker Sabelt 10 years ago, but the global financial crisis canceled most of the growth possibilities, so we decided to focus on our core business. (Brembo sold its stake in Sabelt in 2015.) We also evaluated the aerospace world. But given the kind of technological breakthroughs that are possible now, we must stay focused to avoid the risk of missing opportunities in our core business.
One of the biggest disrupters to the industry will be vehicle electrification. How will Brembo handle the transition?
The brake is a key element of the passengers' comfort. If the car is electrified, it will need an electric brake instead of the current hydraulic one. We will have to understand which cars will be electrified and to what point the cars will be electrified. Generally speaking, cars will be heavier and need better-performing brakes. Imagine stopping in an emergency in a 3-ton SUV.
Is the trend toward SUVs a boon for Brembo because bigger vehicles require bigger discs?
The heavier the car, the better for us, for two reasons: First, as you said, a heavier vehicle needs a stronger and more advanced brake. Second, carmakers look for ways to reduce weight, and we can help them do this.
How is Brembo working on regenerative braking?
We already produce some parts, and we are developing an integrated system. The end solution will be a box with integrated brake management.
Are any vehicles on the road with such systems made by Brembo?
Not in production yet. We are talking about brake-by-wire to various customers. When you touch a product that affects safety, you have to be careful.
Because Brembo serves the premium market, does this mean that in China the company is limited to boosting business with European automakers' local joint ventures?
That's our current position. But we did, however, open an r&d center dedicated to China to be closer to Chinese customers whose cars are aesthetically pleasing but still lack technological content. The more you help them develop future products for export to Europe and the U.S., the easier it will be to supply those vehicles.
What is Brembo's business forecast for 2019 in Europe, the U.S. and China?
I expect we will be able to grow our global business in 2019 despite an overall flat car market. I foresee a slight decrease in the U.S., a slight improvement in Asia, which will be significant in absolute volume terms, and a flat Europe.
Our premium positioning makes us less sensitive to volume contractions. Therefore, we stay in positive territory in the U.S., where we benefit from the technological upgrading of some sports cars from cast-iron brakes to aluminum or ceramic ones. We follow the growth of the Asian market, and in Europe we operate in the very high range, so there is nothing to worry about.