2009 is a harsh year for most of automotive aluminum manufacturers,especially those targeting at North American market. At first, Hayes Lemmerz,the largest automotive wheel manufacturer in North America declaredbankruptcy on May 11, 2009. Hayes Lemmerz had been suffering losses fromFY2005 to FY2009, and the economic crisis became the last straw that forcedit to file for bankruptcy protection on May 11, 2009. The total assets ofHayes Lemmerz valued US$1.34 billion, the liabilities amounted to US$1.41billion, the sales value declined by almost 50% in 2009. Superior, thelargest automotive aluminum wheel manufacturer in North America, also had avery difficult time, and its sales value fell by 45% in 2009.
Also in May 2009, Metaldyne, an aluminum wheel manufacturer headquarteredin Michigan, declared bankruptcy. It was acquired by Asahi Tec, a Japanesemanufacturer, with US$215 million in 2006. Metaldyne’s bankruptcy protectionmade Asahi Tec lost JPY31.97 billion as investment write-down, but did notaffect the cash flow. As a result, the sales of Asahi Tec slumped by 74% inFY2009.
Some Chinese manufacturers also fell victim to the crisis, and HuataiAluminum Wheel is among the most heavily hit. Totally engaged in the exportto the United States, its Tai’an branch suffered sharp revenue decline in2009. Moreover, it had accumulated huge debts during the high-speed expansionin the early stage. Eventually, it had to declare bankruptcy liquidation inMarch 2010. Most Chinese manufacturers of aluminum wheels provide products tothe clients in China, Japan and EU, while small factories mainly exportproducts to America.
China’s automobile market developed rapidly in 2009, driving Chinesealuminum wheel manufacturers, especially large ones, to grow despite themarket downturn. CITIC Dicastal increased its shipment by 22% to 14.38million, securing its first place status by widening the gap with therunner-up. Singapore-listed Lizhong Wheel increased its revenue by 9% againstthe market trends. Lioho Machine Works, Taiwan’s largest aluminum wheelmanufacturer, achieved growth in income, shipment and gross profit margin.
In the EU, all aluminum wheel manufacturers are private enterprises, andthey rarely publish their operation status to the public. RONAL and UNIWHEELfocus on the after-sales markets in Asia-Pacific, North America and theEuropean Union, so they suffered bigger losses. BORBET aims at OEM market,with solid customer base, such as BMW, Volkswagen, Mercedes-Benz, Volvo andFord that have excellent performance, so it suffered less. Japanesemanufacturers have shifted most of their production bases to Mainland Chinaand Southeast Asia, so the cost disadvantages are not prominent. In 2009, thesales volume of Japanese manufacturers was considerable, particularly inChina, so Japanese aluminum wheels manufacturers did better than NorthAmerican and EU manufacturers.
In 2010, aluminum wheel manufacturers got explosive growth. The shipmentof Superior reached 2.36 million in Q1 2010, up 69% compared with Q1 2009;its revenue grew even faster by 84%; it is expected that the growth rate in2010 will be much higher than that in 2009. In December 2009, Hayes Lemmerzannounced that it did not need bankruptcy protection any more. China’sLizhong Wheel had even more outstanding performance in Q1 2010; its revenuein Q1 2010 was 114% more than that in Q1 2009; its profit in Q1 2010surpassed all of its profit in 2009.
China has strong advantages in the production of aluminum wheels. First,the labor costs are lower than that of private enterprises in European Union.
Second, China is the world’s largest alumina supplier, and has obviousadvantages in alumina prices. Some wheel manufacturers set up factories inthe vicinity of alumina manufacturers, such as Sanmenxia Dicastal; or aluminasuppliers set up their own aluminum wheel factories, such as Chiping Xinfa.
Third, China is the world’s largest automobile market and vehicle productionbase, and most aluminum wheel manufacturers are near automobile productionbases or ports to save logistics costs.
The EU’s anti-dumping for aluminum wheels will not have much impact onChina, because the EU market only accounts for 10% of the total aluminumwheel export of China, and the key market for Chinese manufacturers is NorthAmerica. If the United States imposes anti-dumping measures, Chinese smalland medium manufacturers of aluminum wheels will be struck heavily. In thelong term, the United States will implement anti-dumping for aluminum wheels ooner or later, so relevant manufacturers should actively explore other arkets to respond to potential risks.
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