AKEBONO REPORT 2015

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EuropeChinaJapanThailandIndonesiaNorth AmericaEstablishing a new productionsubsidiary in SlovakiaReinforcing the Aftermarket Business to PromoteCorporate BrandingIn addition to selling brakes to automakers on an OEM basis Akebono has aftermarket brake business for general consumers.We will reinforce our aftermarket business by securinggreater recognition through corporate branding initiatives andby enhancing our sales capabilities.Strengthening Global NetworksTo secure responsiveness to a growing trend toward automobileproduction employing global platform systems Akebonois striving to augment its global production network.Specifically the Company aims to build a structure capable ofdeveloping producing and supplying products tailored to localneeds in a more efficient manner. At the same time effortsare now under way to boost capacity to supply brakes forhigh-performance vehicles.Next-Generation Friction Material Production FacilitiesIn the course of brake manufacturing brake pads and otherfriction materials are shaped using heat through such processesas pressing. To reduce the energy consumption of manufacturingprocesses Akebono Brake Yamagata Manufacturing Co. Ltd.(Yamagata Manufacturing) brought a next-generation frictionmaterial production facility online. The energy efficiency of thisfacility is approximately 50% greater than conventional facilitiesthanks to the adoption of innovative manufacturing process.Previously the energy consumption of friction material productionfacilities did not vary by production volume becausethey were designed for the mass production of fixed amounts.However the new facility is designed with the assumption of aminimum production volume of one unit while using lightweightmolds and jigs with fewer of the latter than usual.The new facility is thus able to flexibly accommodate requestsfor the manufacture of a diverse product mix in small lots withcommensurately lower energy consumption.Going forward we will adopt similar facilities in other locationsto achieve a significant improvement in energy efficiency.At the same time we will work to enhance overall productivity.In these ways we will better control production-related energycosts as we aim to make further advance in our manufacturingtechnologies.Initiatives to Secure Medium- to Long-Term GrowthCore Strategy: Strengthening Our Global Business NetworkBrakes for cars produced usingglobal platform systems? Disc brakes for Japanese andEuropean vehicles? Development: Japan; Manufacturing:Japan North America Indonesia Thailand and China? Production initiated in June 2013Brakes for high-performance vehicles? Disc brakes for European luxury cars? Development: Japan; Manufacturing:the United States; Shipping destinationand assembly: Europe? Production initiated in July 2014? Production kickoff at Slovakianmanufacturing subsidiary is scheduledfor August 2015