Automotive Brake Pads Industry Procurement Intelligence Best Practices, Engagement Model to 2027

 Procurement Outlook

Brake pads are one of the key elements of an automotive braking system. These pads are situated inside the caliper and are the part of the system that clamps down on the rotor. 


Brake pads are categorized into four major segments.

  • Semi-metallic brake pads: These are 40-50% metal and very durable. It may not function well in extreme, low temperatures. These brake pads are less expensive and easier on the rotors than ceramic brake pads. Semi-metallic brake pads are majorly used on racecars.
  • Ceramic brake pads: These are the most expensive brake pads. It produces less noise compared to other materials. Ceramic brake pads last longer than semi-metallic brake pads.
  • Low-metallic, non-asbestos organic (NAO): These brake pads are noisy and known to let off a lot of brake dust. The copper or steel that is used in these pads helps with heat transfer.
  • Non-asbestos organic: These brake pads are majorly made from organic materials including fiber, glass, rubber, and Kevlar. Non-asbestos organic pads can wear faster and produce a lot of brake dust.

Demand Outlook

The global automotive brake pads market was valued at USD 12 billion in 2020 and it is expected to grow at a CAGR of 7-8% from 2020 to 2027. With the growing automotive market in developing countries, the demand for brake pads is expected to grow during the forecast period. APAC is leading the global automotive brake pads market with more than 35% revenue share followed by North America and Europe. Based on material type, ceramic brake pads are estimated to hold the largest share in the global market over the forecast period due to their high stability and property to work in fluctuating temperatures. The demand for ceramic brake pads majorly comes from high-performance vehicle manufacturers as it produces less dust and minimum noise.
 
 Cost Drivers

Raw material costs are the major cost driver of automotive brake pad manufacturing. Automotive brake pads are made from a blend of 10-20 types of raw materials. Some of the key raw materials include phenol resin, steel fiber, copper fiber, iron powder, tin powder, aramid pulp, synthetic graphite, etc. The cost of raw material accounted for more than 60% of the overall cost of production. Many manufacturers have shifted their production base to APAC due to efficient supply of raw material and low production cost.


 Read report summary https://www.grandviewresearch.com/pipeline/automotive-brake-pads-industry-procurement-intelligence-report


 Add-on Services
 

  • Should Cost Analysis

Component wise cost break down for better negotiation for the client, highlights the key cost drivers in the market with future price fluctuation for different materials (e.g.: steel, aluminum, etc.) used in the production process

 

  • Rate Benchmarking

Offering cost transparency for different products / services procured by the client. A typical report involves 2-3 case scenarios helping clients to select the best suited engagement with the supplier

 

  • Salary Benchmarking

Determining and forecasting salaries for specific skill set labor to make decision on outsourcing vs in-house.

 

  • Supplier Newsletter

A typical newsletter study by capturing latest information for specific suppliers related to: M&As, technological innovations, expansion, litigations, bankruptcy etc.

 

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A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of the supply chain which helps in efficient procurement decisions.

 

Our services include (not limited to):

 

  • Market Intelligence involving - market size and forecast, growth factors, and driving trends
  • Price and Cost Intelligence - pricing models adopted for the category, the total cost of ownership
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  • Sourcing / Procurement Intelligence - best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best-suited countries for sourcing to minimize supply chain disruption


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