We also develop brake mechanisms for a wide range of vehiclesfrom passenger cars to SUVs to pickup trucks and are proactivelyengaged in the mass production of lightweight aluminum alloy discbrakes. Furthermore, we mass produce rotors and drums for variousvehicle types and market lightweight products with excellent performancewith regard to noise and vibration thanks to the developmentof brake modules.EuropeIn our European operations, we are developing friction materials thatreduce judder and realize greater control during high-speed runningto meet unique performance demands. Also, we are giving full considerationto vibration characteristics and noise reduction as well asthe chemical content of materials to ensure that products meetregional environmental regulations such as REACH (Registration,Evaluation, Authorisation and Restriction of Chemicals). Our R&Dactivities in Europe aim to respond to a wide range of customerneeds, from friction materials designed to meet the above regulationsto friction materials intended for auto exports to the Japaneseand U.S. markets. Of course, our customers are not limited toJapanese-affiliated companies; we develop, produce and supply frictionmaterials for a wide range of customers in the European market.To reinforce our cost competitiveness in Europe, we are standardizingour materials procurement by purchasing from local marketswhile introducing a European-style manufacturing process.In addition to our existing development location in France, wehave established local R&D outposts in Germany and the U.K. InGermany our R&D focus is on developing application technologies fordisc brakes, while in the U.K. we specialize in developing disc brakesfor racing cars and high-end commercial vehicles.ChinaWe have been promoting the development and design of productsthat reflect the needs of local customers. While accelerating thelocal procurement of materials and parts and adopting productionmethods that are best suited to the local environment, we are developingfriction materials with levels of cost competitiveness and performancecharacteristics that make them suitable for the markets ofemerging countries. When developing localized disc brake products,we survey and analyze local customer requirements as well as howthey use our products to determine what they need. Based on this,we can develop and propose products that have the required featuresand performance at a lower cost.“Friction and Vibration, their Control and Analysis” is not merely aphrase in “akebono’s Corporate Mission,” it refers to the basis of theCompany’s core technologies.Akebono constantly leverages its competencies to develop newfriction materials and next-generation brakes for automobiles andother means of transportation, focusing on core technologies andupgrading the analytic methods essential to product development.Our product development efforts focus on the three pillars of“environment friendliness,” “higher performance” and “lower cost.”We have a global R&D structure in place consisting of facilities inJapan, North America, Europe and China.Details of R&D activities in each region are as follows.JapanAkebono is working to develop high-performance, low-cost frictionmaterials for brakes responsive to the entire spectrum of the marketand customer needs. In terms of quality, Akebono’s focus is on controllingnoise and vibration and minimizing brake dust. In addition tousing environment-friendly, safe materials that have less environmentalimpact, we are working on developing new friction materials inresponse to the recent regulations introduced in Washington and severalstates in the United States.At the same time, we are taking steps to reduce costs through theuse of both new materials and improved manufacturing processes,without compromising on product performance and environmentalconsiderations. Among our recent achievements in improving bothbraking and environmental performances, our opposed-type discbrakes, which employ an aluminum alloy developed for high-performancecars, have won solid reputation among customers.We are also focusing our efforts on the “Commonization andStandardization” (C&S) of parts and production processes and otherwiseworking to boost our cost competitiveness. Resources savedthrough these efforts are allocated to the development of new, differentiatedproducts.In the development of environment-friendly products, we are strivingto raise fuel efficiency through innovative weight and drag reductions.We are also developing brakes that apply next-generationtechnologies, including an electro-mechanical brake and electric parkingbrakes with an electro-mechanical actuator. Meanwhile, we arecontinuing our efforts to meet stringent technical and cost benchmarksto reinforce our global supply system and ability to supply builtto-purpose products.The R&D activities at Akebono Research & Development CentreLtd. are focused on the following themes: (1) development of neworiginal materials for improved friction coefficients and safety andenvironmental performances; (2) development of next-generation frictionmaterials to achieve smaller, weight-saving and higher performanceproducts; (3) analysis of friction mechanisms; and (4)improvement of production process.Through such research, we are striving to establish stand-alonetechnologies that realize next-generation brakes and friction materials,aiming to differentiate ourselves from competitors.North AmericaBased on the domestic and global needs of U.S.-based automotivemanufacturers, Akebono is working to develop new friction materialsand next-generation foundation brakes that conform with the environmentalregulations enacted by several state governments, includingWashington State. We support Japanese automotive manufacturersas well with completely local operations, from development to massproduction.Akebono undertakes the development of friction materials for usein a wide range of vehicles, from passenger cars to SUVs to pickuptrucks. These materials realize exceptional NVH control and theirlevel of environment-friendliness more than meets the abovementionedregulations.Fiscal 2012 R&D by Region(Billions of yen)2009 2010 2011 2012 2013Total R&D-Related Expenditures*Years Ended March 318.99.210.0048129.98.2(%)048124.44.86.2 6.34.1Ratio to net salesTotal R&D-related expenditures* The above figures include R&D costs and other R&D-relatedexpenditures incurred as part of regular improvements.