Brembo sees India as big future opportunity

Brembo SpA, the world leader in high-performance brake systems for passenger cars, motorcycles, and commercial vehicles, sees its future in the emerging markets, and believes India has the potential to become the biggest of these.

While the whole of Asia accounts for just 3.7 percent of its turnover at present, the company’s ambition is to have India account for a major share, managing director Mauro Pessi told journalists at the official inauguration of its new plant in Chakan near Pune. Brembo SpA, the world leader in high-performance brake systems for passenger cars, motorcycles, and commercial vehicles, sees its future in the emerging markets, and believes India has the potential to become the biggest of these.

While the whole of Asia accounts for just 3.7 percent of its turnover at present, the company’s ambition is to have India account for a major share, managing director Mauro Pessi told journalists at the official inauguration of its new plant in Chakan near Pune.

Operations at this leased facility actually began in April 2008, having been shifted from the Bosch Chassis Systems plant next door in anticipation of Brembo’s acquisition of the 50 percent held by the former in their joint venture KBX Motorbike Products.

Brembo has been active in India since 1988, when it licensed the Kalyani Group to manufacture brake discs for motorcycles using Brembo technology. KBX was incorporated in 2006.

New brand for Bric

As part of its metamorphosis into Brembo Brake India, the Rs 104.8 crore company is in the process of introducing a new global brand ‘Breco’ exclusively for the braking systems it supplies for small- and medium-displacement scooters and motorcycles in the BRIC and ASEAN countries.

The brand will first be launched in India first, and will replace the KBX brand over the next few months, according to Brembo’s motorcycle business unit director Paolo Magri, who has also been designated MD of Brembo Brake India.

KBX presently dominates the Indian market for motorcycle disc brakes with a 56 percent share, and a customer list that includes every single motorcycle manufacturer except TVS. It has a capacity to machine 90,000 sets of discs and assemble 75,000 “fully bled” assemblies (lever, hose, master cylinder, caliper, and disc) a month.

The company supplies the master cylinder, caliper, and disc for Yamaha’s FZ-16. It also produces master cylinders for Yamaha in Italy, and is preparing to add export programmes for KTM and Piaggio.

Brembo’s “non-motorcycle” activities, situated at a branch office in Pune set up in 2007, include an international purchasing office (IPO) for its car and commercial vehicle systems business unit and a design centre to support its global R&D.

While the company has not fully exploited the potential of its India sourcing as a competitive advantage, this has now been made top priority for the group as a whole and the IPO is being integrated within its global sourcing organisation over the next quarter, Pessi said.

“We will look to source all kinds of components for our brake systems – raw materials, aluminium and grey iron castings, calipers, – and machinery for production and testing, but they must have standards of quality in conformance with our own. Price is not our primary consideration but quality and high standards of productivity and service delivery,” he said.

And though Brembo has started with motorcycle brakes in India, it does not want to exclude other segments. Passenger cars account for 62 percent of its business worldwide, Pessi pointed out, admitting that Brembo is looking for opportunities in this segment and in commercial vehicles. But he added that there are no specific plans at present. “We will analyse the opportunities we see, and if they are found profitable we will pursue them,” he said.