The culture of wheels
Interview with Corrado Bergagna, chairman of Assoruote
Enormous energy and important milestones for Assoruote at two years since its creation. The re-launch of the sector, consumer protection and the culture of wheels are its aims
The aftermarket is doing well and the sector is developing strongly. The Italian aftermarket counts for over one million items. In 2010, there was an increase of about 30% compared to the previous year. The sector had dropped to about 700,000 items but now it exceeds one million overall.
The Association of Italian Wheel Manufacturers has a completely new vision and a dynamic approach that is not lacking in ideas and projects for communicating with the market, from production to distribution to the end-user. We talked about it with Corrado Bergagna, the chairman of Assoruote.
What requirements led to the creation of the Italian wheel manufacturers' association? What are its aims?
In the first place, it was something that was lacking. Italy has a long history and a strong tradition of making wheels. You could almost say that wheels were born in this country. But over the years, something has happened that has led to considerably fewer manufacturers and a strong contraction of the market. This brought about the need or, rather, the necessity to create Assoruote, a national association that now has a strong institutional identity and is an authoritative benchmark for Italian industry and for road safety. A driving force that contemporaneously protects professional operators and users. Its aims include: the re-launch of the sector and greater development of the entrepreneurial culture that is necessary for coping with competition; to give greater strength and a voice to a product that has a very important technical content.
The Association was created two years ago, what has it achieved? What role does Assoruote now play at national and international level?
Undoubtedly, the Association has a dual role as an authoritative liaison between sector professionals and the consumer. Assoruote offers technical and regulatory support for wheel manufacturers and represents the category when pursuing sector demands at bodies and institutions. It is also an important presence at round tables. The Association is a container that provides the ideas and tools for new marketing strategies and for taking Italy's wheel sector to maximum levels. On the other side, it lets all road users know about the world of wheels and emphasizes the importance of quality rims and the risks involved with products that are not well made and are, therefore, unsafe.
Moreover, the Association is a point of reference for the national market and international relationships, for example with the Association of European Wheel Manufacturers, EUWA. In fact it may have seemed pointless to create a national association as numerous members are also members of EUWA, but it was necessary because of the importance of both the domestic market and the target. Assoruote unites not only large companies but also medium and medium-small companies. It directly addresses its own domestic market, understands its peculiarities, an d can interact with international macro companies.
The wheel is certainly a very specialized product. What do consumers know about wheels and their importance for safety?
This is precisely one of the reasons that led to the decision to create an association for the category: the need to inform people about a product that is very important for road safety, but about which little is known outside professional circles. We want consumers to understand that what lies behind a wheel is continuous research, investments in technology and constant product development. An apparently simple wheel is a complex product with active safety. Consumers still don't know much about it, so they are attracted mainly by its cosmetic aspect without making the connection with actual function. Alloy wheels are considered for their visual impact and steel wheels are something that is there and stays there, but technical safety standards and quality are needed for wheels.
The wheel has a specific "task" that no other component performs; it is right that it should be competently represented.
You talked about safety and the need to inform people about the world of wheels. Do you mean the importance of protecting the consumer and the current regulatory picture?
At European level, ECU ONU 124 is the wheel aftermarket regulation. In certain European countries the standard has been harmonized with national legislation. We can say that the standard began in Germany, a reference country for the sector. Germany has a specific standard and wheel homologation has been mandatory for many years. In Italy, we are working seriously on harmonizing the standard with national legislation. Assoruote is not only an institutional body, it also has considerable technical know-how and its technical commission includes experts who also contributed to drawing up regulation 124.
With regard to regulations, it is important to emphasize product traceability and we are fighting for transparency and clarity to protect end users. There must be a chain of responsibility as various wheels on the market do not have references. Regulation 124 provides for a series of markings such as the homologation number, the date of manufacture and a wheel identification number.
Talking about consumer protection, I would like to mention a recent product safety and counterfeiting operation by the Guardia di Finanza of La Spezia. Known as the "circle of life", it led to the seizure of 50,000 alloy rims for cars, 100,000 accessories with the logos of major vehicle manufacturers, and 400 casting moulds. The confiscated rims also underwent random tests based on those provided by the main industries. According to the Guardia di Finanza, they not only infringed intellectual property rights but also, and above all, they were a danger for drivers.
Staying on the subject of standards, a very important European measure was taken recently with regard to an anti-dumping tax on the importation of certain aluminium wheels originating in China.
Yes, it was a very significant measure to protect the market. From a provisional tax of 20.6%, we now have the definitive tax established by European Union regulation 964/2010 of 25 October 2010. The regulation provides for the definitive payment of provisional taxes on the importation of certain aluminium wheels originating in the Chinese People's Republic. The tax rebalances the delta with European production. EUWA and the national associations, including Assoruote, are very committed to this aspect. Anti-dumping has brought balance back to the European market, an important milestone for protection from unfair competition and for market transparency.
Talking about the market, can you give us any ideas about trends? How did 2010 close and what are the first trends of this year?
The aftermarket is doing well and the sector is developing strongly. The Italian aftermarket counts for over one million items. In 2010, there was an increase of about 30% compared to the previous year. The sector had dropped to about 700,000 items but now it exceeds one million overall. Another trend that is being established is the growth of alloy rims for winter tyres.
The offer has changed considerably and this is thanks to new production technologies, despite the cost of raw materials; both steel and aluminium are growing exponentially. Nowadays, the offer is really complete and diversified and the alloy rim is a choice that does not depend on cost, because the difference in price has been greatly reduced.
As to trends, the start of 2011 was positive. Rims are important again. On the other hand, the market is feeling the weight of considerable increases in the cost of raw materials. In less than a year, aluminium has risen from $ 1800 to $ 2700 a tonne; it's the same for steel; just recently the price rose by at least 120 euros a tonne. Higher costs are due directly to the raw materials, but products cannot be sold at a loss. For manufacturers, these increases represent a loss of margins against higher revenues. Serious and sound companies are trying to partly absorb the effect with increases that represent the net value of the increase in the cost of materials.
How does the strong push to buy winter tyres affect the world of wheels?
The huge growth in winter tyres has also contributed to the positive figures for rims. The upswing in the sale of winter tyres is influencing the organization of retail outlets which have to cope with increasing seasonality. Seasonality means that the majority of the work is concentrated in just a few months with not inconsiderable problems of logistics. At the moment, one of the opportunities to improve organization and productivity is represented by fitted units, in other words, rim and tyre combinations. The kit can be prepared by the tyre specialist to spread work more evenly during quieter times and to optimize it when the demand for changing tyres is at its greatest. The reference market for winter tyres and for wheels is still Germany, where about 30% of winter tyres are sold as kits with the wheel already assembled. Complete kits also offer greater flexibility for the management of the different sizes of tyres in circulation.
Talking about fitted units, it is important that users understand that "ready to use" kits does not mean "do it yourself". Tyres and rims must be handled by professionals because they are complex elements that are essential for safety, as provided by law 122/92 which governs car repair businesses to ensure higher levels of road safety.
Even though it is young, Assoruote has already done a lot and has become an authority. Projects? There are many, but the first is to "create more culture". The role of an association must also be to support the entire chain. For example, there are many importers of wheels and we want to start a serious and constructive dialogue with them about quality and safety. To be more open to others and create culture together.
• Assoruote names