To understand the global brakes pads (disc brakes only) market Market size with forecast Segmentation by vehicle type (passenger & commercial) Key trends, drivers, & challenges and its impact on the market SWOT analysis

1. Market Analysis:
Global Disc Brake pads
Author: Abinash Pradhan

2. Market size and forecast: Disc brake pad market
Market size 2018: 6 BN USD
Calculation:
– Akebono stated its market share in Disc Brake (New
automobiles) market is 20% and their sales is 52 BN YEN i.e.
0.5 BN USD. So total market of Disc Brake (New automobiles)
is estimated to be 2.5 BN USD
– Assumed After Market automobiles market to be similar to
new automobiles. Life of vehicle is 15 years, and brake
replacement is done after 60-70 thousand km driven. So
assumed equal number vehicles would come for
replacement. Est to be 2.4 BN USD
– All others vehicles are estimated to have 20% of the market
so these are calculated to be 1.2 BN USD
– Grand total (100%): 6 BN USD
– OEM automobiles (40%): 2.4 BN
– After market Automobiles (40%): 2.4 BN
– Others (20%): 1.2 BN
Market size 2023: 6.6 BN USD
Forecasted 2% YOY
Calculation:
– Automobile sector sales are estimated to be in range of 2-
3% in next 5 years (IHS estimated)
– Brake systems sales would largely depend on this factor
above
– So minimum possible forecasted growth YoY is 2%
Source: Akebono and Nisshinbo annual report, OICA, IHS report

3. Segmentation of disc brake pad market
4.3
72%
1.7
28%
Segmentation of disc brake pad by
type (2018)
Passenger vehicles Commercial vehicles
Calculation:
– Estimated total market size of disc brake pad
is 6 BN USD (2018)
– In disc brake market, most of the sales
happen in 2 categories (passenger and
commercial vehicles)
– According to OICA (International Organization
of Motor Vehicle Manufacturers), in 2018
globally 95 million vehicles are sold of which
68 million (72% of total) are passenger
vehicles and 26 million (28% of total) are
commercial vehicles.
– Considering the same split of vehicles sold to
the disc brake market we estimate the disc
brake pad market for passenger vehicles is
4.3 BN USD and 1.7 BN USD for commercial
vehicles.
Total market size: 6 BN USD
Source: Akebono and Nisshinbo annual report, OICA report

4. Trends, drivers, & challenges of disc brake pad
market
Trends
– Asia Pacific holds significant share in the
automotive brake pads market size owing to
high penetration of two-wheelers.
– Europe and North America market is going to
increase due to the higher concentration of
OEMs in these regions.
– Automotive Brake Pads Market size valued at
over USD 6 billion in 2018 and is set to
witness over 2% CAGR from 2019 to 2025.
– Aftermarket segment is expected to grow
faster than OEM market.
– Development of green brake pads will have a
positive impact on the market and contribute
to its growth significantly over the forecast
period.
Drivers
– Penetration of front wheel automotive
brake pads are growing strongly.
– Government bodies are mandating
installation of disc brakes supporting the
industry proliferation.
– Developing countries like China and India
are driving the major vehicle sales globally
influencing the industry growth.
– Rising installation of disc brakes instead of
drum brakes automobiles for superior
braking efficiency and safety.
– Growing demand for higher performing
vehicles and longer service intervals.
– Manufacturers are engaged in expansion
of new brake pads production facilities for
generating opportunities to increase
regional revenue share.
Challenges
– Stringent government regulations for pad
manufacturing standards and raw materials
will limit the brake pads market growth.
– High manufacturing cost involved is expected
to restrain the market growth.
– Increasing raw material prices will hinder the
automotive brake pads market proliferation.
– Highly competitive market
– Too many players: There are over three
hundred manufacturers located in the
developed areas of China.
Source: Various analyst reports (check the working file for clarification)

5. SWOT analysis of disc brake pad market
Strengths
– Government bodies mandating installation of disc brakes.
– Rising installation of disc brakes in automobiles.
– China, India Thailand and Indonesia account for major
vehicle sales and influence the industry growth.
– Manufacturers expanding their production facilities in APAC
market (Federal Mogul, Bosch, Nisshinbo Group Company
and Sangsin Brake have built their factories in China).
Weaknesses
– Stringent government regulations for pad manufacturing.
– Uncertainty among Japanese OEMs over Brexit.
– Lack of durability in brake pads requires continuous product
developments
– Increasing buyer negotiating power.
Opportunities
– Brake Pads Market size valued at over USD 6 billion in 2018
and is set to witness over 2% CAGR from 2019 to 2025.
– Increasing congestion of vehicles on roads across major
cities globally will create demand for superior braking
systems.
– Increasing demand for automobile spare parts globally.
– Increasing vehicle sales coupled with availability of light
weight and advanced friction materials leading to segment
premiumization.
Threats
– Stiff competition from low-cost drum brakes in budget
segment cars.
– Highly competitive market with several players globally.
– High manufacturing cost involvement is expected to restrain
the market growth.
– Rising raw material prices.
Source: Various analyst reports (check the working file for clarification)