Indian Market Expected To Embrace Aluminium Wheels In A Big Way

Interview Indian Market Embrace Aluminium Wheels Maxion Wheels
Indian Market Expected To Embrace Aluminium Wheels In A Big Way

The global wheel manufacturing space is undergoing a steady shift from steel wheels to aluminium wheels. Brazil-headquartered Maxion Wheels has been at the forefront of this shift, and in order to cater to the Indian market demands, it had recently laid the foundation of an aluminium wheel plant at Pune that is expected to be up and running by 2019. Auto Tech Review caught up with Pieter Klinkers, CEO, Maxion Wheels to know about Maxion Wheels’ global presence and new focus areas.

Pieter Klinkers has been serving as the CEO of Maxion Wheels since March 2015. Prior to the current assignment, he had served as President for the company’s Europe, Africa and Asia-Pacific regions. Klinkers had joined as Vice President of Sales and Marketing at Hayes Lemmerz in 2005, which was acquired by Iochpe-Maxion in 2012. He also held various senior marketing and sales positions at Michelin. Klinkers’ strategic leadership has helped Maxion Wheels enhance its product diversity as well as expand its geographic footprint, consistently responding to the continuously evolving customer needs. Klinkers has positioned the company well through strategic investments and partnerships. He instituted a company-wide ideation process that engaged more than 10,000 employees in putting their ‘creative’ thinking cap on to solve various customer challenges. He graduated from Maastricht University’s School of Business and Economics in the Netherlands with a master’s degree in Business Administration.

ATR _ Give us a brief understanding about Maxion Wheels’ existing business verticals?

PIETER KLINKERS _ Maxion Wheels basically operates three business segments – steel wheels for cars, aluminium wheels for cars and steel wheels for trucks. All these three units have different volumes but more or less same sales turnover. Globally, demand for aluminium wheels is much higher than steel wheels; its penetration at about 68 %. We produce 26 mn steel wheels and 15 mn aluminium wheels for cars, and 9 mn steel wheels for trucks annually. Aluminium truck wheels are a new focus area for us and we intend to grow in that space as well.

Maxion Wheels serves its global OEM customers from 30 locations across 15 countries as leaders in production of automotive wheels, chassis components and circle components. Maxion has been present in India since 1996, producing steel wheels for the Indian market as well as exporting from India. Production at our Pune facility started in 1996, and today produces 4 mn steel wheels for cars and 1.2 mn steel wheels for trucks annually.

What’s the rationale behind creating a new entity Maxion Wheels Aluminium India Pvt Ltd, when you already have a steel wheel facility in Pune?

It’s a different process. Of course, our steel wheel facility is there in Pune but we thought it was not fair on our part to engage the same management of the steel wheel facility for our new aluminium wheel facility. It needed a different company set-up and moreover the steel wheel facility was a joint venture with Kalyani, while this is a wholly-owned facility. Having a new plant location was in the best interests of Maxion.

India is an important market for us, and we are excited to participate in its growth journey by strengthening our more than 20 years of existence here with the launch of this new plant. India produces 3.7 mn vehicles annually and we expect that number to go up to 7 mn vehicles over the next five to six years. The current penetration of aluminium wheels for passenger cars in India is around 25-30 % and we expect it to go up to 45-50 % over the next few years. Given this scenario, we feel it is important for us to expand our aluminium wheel presence as well as add more capabilities to cater to the automotive wheel demand in India.

We want to leverage our global wheel-making expertise in the Indian market and are keen to replicate the global aluminium wheel success in India. Asia represents 7-8 % of our total revenue and we expect that percentage to go up over the next few years given the expected growth in countries like India, China, Thailand and other parts of Asia. Maxion Wheels expects aluminium wheels to attain the same level of popularity witnessed globally in India by 2022. Incidentally, Iochpe-Maxion also completed 100 years this year. This is a big milestone, and this project is an important step for us.

The global aluminium wheel penetration is currently around 68 % and is poised to go up going forward

Throw some light on the capabilities of your new aluminium wheel plant.

Our new plant located at Khed City, Pune is spread over an area of 25,000 sq m and will start production in the third quarter of 2019. This plant will initially produce 2 mn aluminium wheels and subsequently ramp it up to 4 mn wheels. It will have a set-up to include premium bright machined wheels from the start as well as 32 low pressure die casting machines, heat treatment, x-ray and 16 machining cells. The plant will also feature one paint shop with a capacity for 2 mn wheels, powder coat followed by wet paint base coat and clear coat. It will produce wheels that will be 14” to 22” in diameter and 4” to 9” in width.

Give us your perspective on the new innovations witnessed in the global wheel making space.

Wooden wheels were used 100 years back and 30 years back, there was a line of thinking among people that aluminium wheels were only meant for the luxury car segment and had more to do with fashion, but now you even see small vehicles using aluminium wheels. I think the pace of aluminium wheel penetration will catch up faster in India than the rest of the world. Today, aluminium wheels are growing faster than steel wheels. It will not be fair on my part to say what is going to happen over the next 10 years but I’m pretty convinced that there will be more changes over the next 10 years than what we have witnessed over the last 50 years.

We believe aluminium wheels will witness further development, as they offer different style options. Although they are expensive than steel wheels, we’re certain there will be a market for aluminium wheels. Customers who prefer frequent styling changes will find aluminium wheels a better option. For instance, if you wish to change the aluminium wheels in your car, it is five to six times cost-effective than steel wheels because the tooling to make steel wheels is very expensive. When we talk of autonomous vehicles, we might have completely new type of wheels, maybe even cheaper. Surely there will be more changes in the kinds of wheels we will have over the next 10 years.

You have talked about the steadily rising demand for aluminium wheels; how do you assess the future of steel wheel across the globe?

It’s a debate that has been raging for more than 10 years now. Steel wheels will stay probably for shared mobility as that segment of vehicle users may not be so keen to have a shiny aluminium wheel. Aluminium wheels will always remain expensive than steel wheels. The raw material and processing for both types of wheels are different. The raw material for aluminium wheel is far more expensive than a steel wheel. Aluminium wheels should never be compared to steel wheels as the former will never be cheaper no matter how competitive you are. OEMs and customers will decide whether they want steel or aluminium wheels. Steels wheels have stamping and presses, while aluminium wheels is all about casting – low pressure die casting – it is a bit like baking cookies and is time consuming – you need to brush, heat, machine and paint it.

With regards to future trends, I do believe that aluminium wheel penetration will go up but it is important to understand that steel wheels are not going away. There will always be a market for steel wheels. Maxion has developed other alternatives around steel wheel that will enable us to be better positioned from the peers’ point of view. It is important to be in the market at the right time serving our customers and adopt a flexible approach in offering both options.

How has the wheel manufacturing process evolved over the last two decades or so?

The manufacturing process today is lot more automated; of course, it has nothing to do with costs but with consistency and quality. Maxion Wheels has been deploying more than 100 robots at its Chakan plant (meant for manufacturing steel wheels) and we intend to deploy 100 robots at our new aluminium wheel plant. Cars are driven much faster than say 30-40 years back. Safety is a critical element in car wheel manufacturing as it is the case for other automotive components and it is important that our processes are highly automated. At all times, we want to ensure a safe product.

Do you think the wheel market is going beyond steel and aluminium wheels?

Maxion is looking to experiment but for now we do not see a solution that is cost-effective. There are carbon fibre wheels as well as plastic wheels but not for current applications. If the vehicle changes then maybe other materials will come into play.

Aluminium wheel penetration will go up in future, but steel wheels will stay

Maxion has acquired Kelsey Hayes, Lemmerz and Fumagalli over the years – how have you leveraged their combined expertise?

A huge amount of effort has gone in creating team work – stimulating sharing of experiences, knowing each other and having the openness to share experiences. Maxion has undertaken a lot of effort over the last six to seven years and we are seeing the full effect of it now. It involves a lot of hard work in bringing the people together, ensuring all of them are comfortable and creating one company culture.

How do you assess the state of steel wheels in India along with your focus on aluminium wheels?

There is a lot of competency in India for steel wheels and it is only to be expected as it has existed in India much longer. The penetration of aluminium wheels in India is currently around 20-25% and customer demand for such wheels has steadily increased when you take into the consideration the fact that five years back such wheels only had a small percentage of penetration. We are excited to leverage our global expertise and meet the growing aluminium wheel demand in India. From the Indian market perspective, I feel there will be growth for both aluminium wheels and steel wheels. However, I don’t see any scope for aluminium wheels for trucks in India.

TEXT: Suhrid Barua

PHOTO: Maxion Wheels