Aluminium Wheels and Castings

Headquartered in the city of Qinhuangdao in Hebei Province, CITIC Dicastal is the largest automobile aluminium wheel manufacturer and exporter in the world, with an approximately 17% global market share. It also produces automobile aluminium castings, including chassis parts, power train parts and body parts.

CITIC Dicastal currently has 27 manufacturing bases, of which 7 are outside China, mainly in Europe and the United States. Total annual production capacity of 35 million aluminium wheels and 80,000 tonnes of aluminium castings. Aluminium wheels are by far the largest profit contributor, accounting for approximately 70% of total revenue in 2014.

A key to CITIC Dicastal’s success is an operating model that centralises product design and development, branding, quality control, production planning and product sales.

Year in review

In 2014, CITIC Dicastal sold a total of 34.4 million aluminium wheels and 73,000 tonnes of aluminium castings, an increase of 12% and 13% respectively as compared with 2013. The increases were mainly due to a rise in automobile sales, both in China and overseas including the United States, Japan and the European Union. CITIC Dicastal’s net profit was RMB640 million, an increase of 38% from 2013.

One third of the aluminium wheels produced by CITIC Dicastal were sold to the overseas market, with the United States being the largest. For aluminium castings, 89% of the volume sold was to markets outside China.

In 2014, CITIC Dicastal invested in an aluminium wheel plant in Michigan, USA, which is expected to commence operation in 2016, providing an estimated annual production of 3 million aluminium wheels for the North American market.

Products and customers

Most of CITIC Dicastal’s aluminium wheels are produced in China. The company manufactures and delivers products in accordance with customers’ orders. This enables the company to have a very low inventory.

Aluminium wheels are sold directly to automobile manufacturers. Its main customers include General Motors, Ford,Volkswagen, Daimler-Benz, BMW, Toyota, Honda, FAW Group, SAIC Group and Dongfeng Motor Group. The top 10 customers contributed over 64% of the company’s total revenue in 2014.

All new wheel products must undergo a stringent certification process before entering the procurement systems of these auto manufacturers. This is a critical step in securing long-term sales agreements with the major auto industry players. CITIC Dicastal has the only wheel testing centre in China authorised and certified by GM, Ford and Volkswagen.

Most of the aluminium castings are produced by overseas manufacturers based mainly in Germany, the Czech Republic and the United States. Aluminium castings are sold to auto manufacturers such as Daimler-Benz and Volkswagen, as well as auto component manufacturers such as TRW, ZF and Bosch.