Akebono Brake Industry Co. will invest around JPY10 million this year and the next to expand in North America, President Hisataka Nobumoto told Bloomberg News in an interview. The investment entails spending JPY7 billion this year and JPY3 billion in 2014. Akebono, which counts General Motors, Ford Motor Co. and Nissan Motor Co. as its customers, is expanding production of rotors at its Clarksville site in Tennessee as it bet that the current gains in the auto industry in the United States will spark a revival of earnings growth.
According to Nobumoto, increasing demand for its products have enabled Akebono to boost prices parts prices in the US. He forecasted that demand in the US will continue to remain strong for the next year or two. Akebono’s largest customer is GM, which accounted for 24 percent of its annual revenue for the year ended March 2013. Thanks to strong demand for its pickup trucks, GM was able to post a 9-percent surge in sales this year.
Nobumoto remarked that Akebono had expected a better first quarter ended June 2013, considering the recovery of the US vehicle market. The company instead posted a 48-percent drop in profit in the first quarter ended June 2013 to JPY478 million. The brake supplier expects its net income for the fiscal year ending March 2014 to hike almost fivefold to JPY2.5 billion.