Reinventing the wheel to keep manufacturing jobs

Australia's oldest wheel manufacturer will invest $5.5 million over the next nine months to secure a contract to supply car giant Toyota for another 10 years.

The new wheels will be fitted to all local and export versions of the Toyota Camry and Aurion sedans from 2015 to 2022, although some models will have them from as early as next August.

Adelaide-based ROH wheels, which once supplied all four local car makers -- Toyota, Holden, Ford and Mitsubishi, but of those now only supplies Toyota's car assembly line in Melbourne -- has already begun the ground works at its Woodville North plant to make way for new hi-tech machinery.

ROH will be one of only about 20 wheel manufacturers in the world to use "flow forming" technology, which makes alloy wheels lighter yet stronger, saving aluminium in the production process and contributing towards better fuel economy in cars.

Once the new machinery is operational the ROH factory will be able to produce 480,000 alloy wheels a year, with most of them being freighted interstate to Toyota on six B-Double trucks each week.

ROH general manager Bill Davidson said his company had worked closely with Toyota on the new technology after adopting the Japanese manufacturer's production efficiencies. "Toyota is always about constant improvement, a better way to do things," said Mr Davidson. "They just don't walk in here and demand a cheaper price, they help you find ways to achieve it."

Mr Davidson said Toyota continued to source Australian-manufactured wheels even though the car maker can import them more cheaply from China (as Holden and Ford do). "Toyota believes in supporting local suppliers as much as possible, even if it might cost them a little more," said Mr Davidson.

"But the benefit for Toyota is that they take efficiencies we have found in a high-cost environment and take them to other factories around the world where they can make even bigger savings because they're producing higher volumes."

Contrary to perception Toyota cars have more local content in them than Holdens. The Toyota Camry is made up of 65 per cent local parts, compared to 50 per cent for the Commodore and just 30 per cent for the Cruze, according to figures supplied by the car makers. The Ford Falcon sedan and Territory SUV have 70 per cent local content.

"Flow forming" technology has only been used in mainstream wheel manufacturing for about three years, having been pioneered by a German company, Mr Davidson said.

But the manufacturing equipment ROH will use will come from Japan.  The new production efficiencies will mean that 11 contractor positions will be no longer be required, trimming ROH's workforce from 154 to 142.

At its peak 10 years ago ROH employed more than 450 workers and had three press lines running 20 days a month. It now has one press line running nine days a month.  "You never like to let people go but unfortunately this is the price of survival," said Mr Davidson. "We have to adapt."

Cheap Chinese wheels have all but "crippled" the wheel manufacturing industry here and overseas, said Mr Davidson. "So we've had to work bloody hard to stay afloat and move with the times."

An unexpected bonus, the Toyota project also helped ROH find new efficiencies when manufacturing its regular steel wheels. "We're producing wheels here at 25 per cent less cost today than we were 10 years ago," said Mr Davidson.

While ROH has received some government assistance in the past it says it has not used taxpayer funding to help pay for this new deal. ROH is waiting on the outcome of a Clean Technology Grant application, but the scheme is likely to be scrapped by the new Coalition Federal Government.

This reporter is on Twitter: @JoshuaDowling