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The Big Wheels Abroad Are Made in U.S.A. : Commerce: 'Mag' manufacturer looked at blue jeans as the model for its foreign marketing.

August 05, 1992|GORDON DILLOW | SPECIAL TO THE TIMES

In these days of trade deficits and foreign domination of what used to be American markets, there is one product that benefits from being "Made in the U.S.A." When car owners from Holland to Argentina and from Greece to Japan want to put sporty "mag" wheels on their vehicles, increasing numbers of them want those wheels to have "American" written all over them.

Anthony Munoz and the 2,000 other employees of the American Racing Equipment company of Rancho Dominguez are happy to oblige.

Starting from scratch a few years ago, Munoz and American Racing Equipment (ARE) have created a growing demand for American-made "mag" wheels in 37 countries in Europe, Asia, South America and the Middle East.

"Mag" wheels, so called because originally they contained magnesium, are those flashy, spoke-like wheels most often seen on sport, high-performance and luxury vehicles; today they contain primarily hardened aluminum.

The demand for them is based partly on quality, but mostly on the image of America--that is, the place where the car began, the land of style and fashion and flash.

Munoz and others say it's an image that more U.S. companies should try to capitalize on.

"To (foreign car owners, especially young males) America is still the land of the original hot rod," said Munoz, director of American Racing Equipment's international operations. "They don't want an ordinary wheel, they want an American wheel. It's a matter of prestige."

In fact, in terms of marketing approach, Munoz compares his company's custom wheels with one of the most successful international products the United States has ever produced: blue jeans.

"We're in the fashion business too--the automotive fashion business," said Munoz, 53, who launched American Racing's international operations in 1989.

"My role model in this is Levi Strauss. I remember back in the 1940s, blue jeans were considered a factory worker's uniform. Now I see women in the most fashionable cities in the world paying $200 for cotton denim pants that say 'Levis' on them. . . . That's what we're doing: creating a mystique around the name 'American Racing.' "

Several of the company's overseas distributors agree that simply having the words "American Racing" prominently etched on the wheel is a big selling point.

"They like to see the name 'American' on the wheel," said Peter Dykstra of R&O Group, a Netherlands company that in the last year and a half has sold about 10,000 ARE licht metaal wheels. That's Dutch for "light metal" and the equivalent of "mag" for Dutch vehicle owners who want to add a little extra style to their cars, 4 X 4s, pickups and vans at a cost of about $100 (U.S.) per wheel. "It's part of the image."

"Three years ago it was unknown," said Gonzalo Vila, an off-road racing champion and distributor of ARE wheels in Argentina. "Now it is very popular." Vila said that in the past year he has sold 7,000 ARE aleacion , or alloy wheels, to Argentine drivers.

"Oh yes, they like these wheels very much," said George Papadiamantis, who has sold more than 30,000 ARE wheels-- aluminu zantes --in Greece since 1989. "Everybody knows American Racing wheels."

But they haven't known them for long.

American Racing, which traces its roots to the Rebel Wheel company founded by race car driver Parnelli Jones in 1964, is the largest manufacturer of custom wheels for the U.S. "aftermarket," that is, wheels installed by the owner after the vehicle is purchased.

Until recently the company had virtually ignored foreign markets. In 1988, for example, out of 4 million wheels manufactured by the company, only a minuscule 2,500 were sold overseas, compared to an estimated 150,000 wheels to be shipped overseas this year.

It was a neglect of potential markets that some people say affects too many American businesses.

"I think too many American companies have a mental roadblock to exporting," said Mary E. Barton, executive director of the World Trade Center Office of Cal State Long Beach, which helps American businesses that want to break into exporting. "They think you have to speak the language, that it's too far away, that they can't compete. But those are more imaginary barriers than real ones."

Barton said this is especially true of products such as blue jeans or custom car wheels that could capitalize on the "American" image.

Munoz was hired in 1989 to develop an international market for ARE wheels a year after the company became a subsidiary of a Canada-based multinational conglomerate called Noranda Inc. He decided right away that the American image would be the product's most valuable asset overseas.

"When I started I didn't know a wheel from a doughnut," Munoz said. "But I knew that no matter where you go in the world, everybody wants a product that's made somewhere else."

Improving quality, Munoz said, required a $10-million capital investment in machinery for the company's manufacturing plants in Rancho Dominguez, an industrial area just south of Compton and Gardena. Almost 90% of the company's 2,000 workers are Latino. The company improved quality control, which in five years has resulted in a decrease in the reject rate from 25% to less than 1%. Now, Munoz said, the company is able to compete in the world's two most demanding markets for American products: Germany and Japan.

But while quality makes it possible to compete, Munoz said, when it comes to custom wheels it is image that attracts the overseas consumer.

"Let's face it, we make a product that nobody really needs," he said. "Every vehicle comes out of the factory with wheels on it. We try to create a demand for a more attractive wheel, an American wheel. And it's working."

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