Global and China Automotive Aluminum Wheel Hub Industry Report

 China has become a manufacturing center of aluminum automotive wheels in the world now. The export of wheels mainly focuses on the retail market. In the recent years, many foreign OEMs have begun to purchase aluminum automotive wheels directly from China because:

In the cost structure of Chinese aluminum automotive wheels, raw materials account for 550% of the total cost, and labor cost takes 4%. For developed countries, raw materials account for 50%, and labor cost takes 150%. Therefore, China has competitive advantages in labor cost. At present, the average profit margin of foreign automotive aluminum alloy industry has fallen to 2%, so there is no possibility for the decline of selling price. In order to control the cost, international automobile giants have begun to purchase from China aluminum automotive wheels with price advantage or set up joint ventures in China. Japanese manufacturers have already established joint ventures in China.

China also has advantage in upstream resources, but the advantage is reflected in the quantity of alumina manufacturers instead of rich bauxite resources. The competition in the prices of alumina is fierce. After breaking the monopoly of Chinalco, private alumina factories emerged everywhere. To the aluminum wheel industry, raw material cost is the most important factor, in which Chinese manufacturers have advantage. Roaring alumina prices in 2008 made many manufacturers suffer losses. Although alumina price decreased in the second half of 2008, it was kept stable with a slight increase after major manufacturers made efforts to reduce output.