Study Shows Styled Steel Wheels Shatter Perception

Industry Leaders Expect Styled Steel Wheels to Generate Demand and Increase Profits for OEMs on Upgrade Packages

DETROIT, MI, May 14, 2001 - A study sponsored by American Iron and Steel Institute (AISI) and conducted during November / December 2000 by Burke, Inc., an internationally recognized market research firm, indicates that replacing traditional aluminum wheels with styled steel wheels in upgrade packages would maintain option package demand and revenue. Car buyers perceive styled steel wheels as stronger and safer than styled aluminum wheels.

Karim Karim, chair of AISI's Wheels Task Force said, "The Burke study is good news. It concludes that OEMs can maintain revenue with lower cost styled steel wheels. And, equal revenue minus lower cost yields increased profits."

Burke conducted the study among 300 consumers visiting retail shopping malls in 17 cities across the United States. Using photographs of a Chevrolet Malibu sedan, a Dodge Ram 1500 Regular Cab pickup, and a Ford Windstar van for displaying styled steel and aluminum wheels, researchers measured consumers’ price perceptions, preferences, and willingness to purchase the wheels. Researchers also asked for consumers’ opinions on other wheel aspects, such as safety, strength, and weight.

Price perception data from the study showed that demand and revenue were for all practical purposes equivalent for vehicle upgrade packages with styled steel wheels versus those with styled aluminum wheels.

When respondents ranked their wheel preference among four designs, steel wheels were consistently ranked either at parity with or higher than aluminum wheels. While many respondents would not pay more to have one wheel material versus the other, a notably higher percentage of respondents said they would pay more to have styled steel wheels than would pay more to have styled aluminum wheels. Styled steel wheels were more readily associated with greater strength and safety. Additionally, respondents associated lower cost with aluminum wheels, perhaps in contrast to the perceived strength and safety of steel.

Using Burke’s proprietary PricePoint® research method and printed color stimuli for the appropriate vehicle type, questions regarding price perceptions and purchase intentions were used to calculate demand and revenue projections. The researcher first presented the respondent with a page showing a photo of the base model equipped with the base wheel, the standard model features, and the approximate vehicle price. The researcher then presented two new pages, each showing the vehicle now equipped with a different wheel, as part of an upgrade package. Each page listed the features offered in the hypothetical upgrade package, including the wheel type (Figure 1). On one page, this wheel was identified as an aluminum wheel and on the other page it was identified as a steel wheel, in order to isolate the impact of wheel material. The upgrade packages were identical except for the labeling of the wheel. For each vehicle type, four wheel designs were included in the study — a bright aluminum wheel, a bright steel wheel, a painted aluminum wheel, and a painted steel wheel. Each respondent evaluated two of these designs.

The researcher asked the consumer PricePoint® questions using the first pair of pages as described above, and then using a second pair of similarly constructed pages that showed the second wheel design. The two wheels were selected in advance by a rotation designed to ensure that each wheel design, material, and finish was evaluated randomly and an equivalent number of times across respondents.

A presentation of the, "Steel vs. Aluminum Wheels Consumer Research Study," by Burke Marketing Research, is available online.

The Wheels Task force of the Automotive Applications Committee, American Iron and Steel Institute commissioned the project. AISI believes that by using styled steel wheels, OEMs can increase profits. This is now possible because today’s steel wheels have finished styling/trim packages not available in years’ past.

This news release, the complete Burke study, and other steel-related information are available for viewing and downloading at American Iron and Steel Institute/Automotive Applications Committee’s website at http://www.autosteel.org.

The Automotive Applications Committee (AAC) is a subcommittee of the Market Development Committee of AISI and focuses on advancing the use of steel in the highly competitive automotive market. With offices and staff located in Detroit, cooperation between the automobile and steel industries has been key to its success. This industry cooperation resulted in the formation of the Auto/Steel Partnership, a consortium of DaimlerChrysler, Ford and General Motors and the member companies of the AAC. For more news or information, view the American Iron and Steel Institute/Automotive Applications Committee's website at www.autosteel.org.

Wheels Task Force member companies:
Accuride Corporation
ArvinMeritor Wheels Division
Bethlehem Steel Corporation
CMC/CLA
Central Manufacturing Company
Ford Motor Company
General Motors Corporation
Hayes Lemmerz International
Hess Engineering, Inc.
LTV Steel Company
Lacks Wheel Trim Systems
McKechnie