UniWheels – Now Number Three in Europe

The early 2008 acquisition of the ATS-Group’s European interests by the UniWheels group has led to the emergence of an aluminium wheel business that ranks number three in the European market. Subsequent to the purchase, which followed the insolvency of ATS Beteiligungs in July 2007, UniWheels has assumed the number three market position in Europe behind Ronal and Borbet (who produce approximately 12 million wheels per annum each) and ahead of Hayes Lemmerz and Turkish supplier CMS.

Production takes place at UniWheels’ three facilities, two of which are located in Poland (Stawola Wola) and one in Germany (Werdohl). Combined annual capacity at the three plants is around seven million cast aluminium wheels, although current market conditions dictate that not all of this capacity is currently utilised. Of course the automotive industry crisis is affecting all suppliers, and UniWheels is being helped by having a stronger presence in the more stable replacement market than the two market leaders. Harald Jacksties, head of marketing for the group, estimates the current ratio of original equipment to replacement market wheels to be almost 2 to 1, although he notes the continued importance of the original equipment market: Automotive industry suppliers are by and large driven by their bigger customers, who are naturally much more involved in this sector.

The group’s largest OEM customer, based on volume, is said to be Audi, followed by Volkswagen and Volvo. In the past this list also included the Daimler companies Mercedes-Benz, Smart and AMG, yet the fickleness of the OE market means that sometimes a company benefits from the launch of a new model, while sometimes it suffers when a production run comes to an end. Over the long run, however, the ups and downs mostly cancel each other out, and overall UniWheels’ OE customer mix is well placed. The company also seems likely, along with Borbet, to benefit from the recent bankruptcy and closure of Norwegian wheel manufacturer Fundo Wheels, a major supplier to Volvo.

Despite this silver lining, times are also hard for the UniWheels group. By the end of this year the company’s workforce of approximately 1800 will be whittled down to around 1500 to 1600. The company’s corporate structure has been streamlined, and the relocation of senior functions, such as chief financial officer, personnel manager, financial controller and IT staff to the existing ATS headquarters in Bad Dürkheim, Germany has, where possible, already been completed. The ATS administration building, which had long stood empty, is once more bustling with activity.

The integration of individual parts of a business can sometimes seem like a complicated puzzle. In the case of UniWheels, however, the individual pieces fit together quite well. The two Polish facilities, located across the road from each other, complement each other nicely. The facility that previously belonged to UniWheels focuses on the production of wheels intended for the replacement market, as even before the ATS acquisition it focused upon smaller wheel designs. The newly added former ATS plant primarily serves OEM customers, as in addition to its greater emphasis on larger sizes the plant is audited and certified by the automotive manufacturers.

Recent overall capacity cuts have largely affected the company’s Werdohl facility; capacity at the two Polish factories is to remain largely intact. However the news is not all bad for UniWheels’ German operations. On top of investments made in recent months, such as those to increase efficiency at the former ATS plant in Stawola Wola, plans are afoot to make the Werdohl plant a high-tech location. A double-digit million euro investment in new coating technology and manufacturing processes at the German plant is already planned for the next few years. And with an annual capacity of around 1.3 million units, the plant’s continued survival is not in doubt.

European aluminium wheel manufacturers such as UniWheels have a particular edge over low-cost manufacturers from Asia in the more “difficult” wheel sizes of 18-inch and larger. To strengthen this market advantage, the engineers from ATS and UniWheels have pooled their expertise and developed a completely new technology they call APR (Advanced Pressure Rolling). This technology has, as hoped, already begun to be well received by vehicle manufacturers as a genuine developmental leap. The first OEM development order for APR technology has already been granted.

The premium brand in the UniWheels portfolio is ATS, and in spring 2009 a series of exclusive new designs – Superlight, X-treme and Victory – are set for introduction. This brand is accompanied by Rial, a brand that Harald Jacksties says represents traditional, prestige and impeccable quality, and Alutec, which has a more modern and ‘cool’ focus.