ASK Michael Rojas what degree his being a car nut is, he would tell you jokingly it’s “bordering on obsessive.”
Whether that is a joke, Rojas has to be car nut, gear head or motor geek to run a company that is a pioneer in alloy rim manufacturing not only in the Philippines but also in Southeast Asia.
In 1976, Rojas’ father and Italian businessman Antero Pedrini founded Philippine Aluminum Wheels Inc. (PAWI), the company behind the Rota brand of alloy rims that were first marketed as Rota-Italia until 1983.
Before PAWI was founded, Rojas’ father was already involved in the automotive business with the manufacture of Bravura mufflers and headers, and importation of Momo steering wheels. Their family also imported the Magic 3 air freshners that were manufactured for a while in the Philippines.
Pedrini and Rojas’ father also brought into the country an Italian brand of alloy rims that were popular with Ferraris.
In 1976, Rojas said the Italian revealed that it was his dream to manufacture alloy rims in the Philippines.
“We were importing mags from Italy. Then the Italian, Pedrini, said ‘You know, it is my dream to put up [an alloy rim factory]in Asia. Then why not in the Philippines?’ In fact, we are the first wheel makers in Southeast Asia,” he added. Mags is the street term for alloy rims that were first known to be made from magnesium.
“My dad said, ‘I don’t have money.’ ‘Don’t worry, I’ll lend you money, the Italian said,” Rojas said.
It turned out Pedrini also loved to visit beaches in the Philippines.
“[The Italian said] ‘I really want to put up a plant in the Philippines. I also want to visit the beaches,’” said Rojas, who now heads PAWI, with a hearty laugh.
He cited his father’s courage as also a factor in putting up the first alloy wheel manufacturing facility in Southeast Asia and the second in the whole of Asia. The first alloy rim factory in Japan was established in 1971.
“Father was also courageous,” Rojas said.
During the 1970s, magnesium or alloy rims were not yet known to most motorists because most vehicles coming out of the factories were equipped with stamped steel rims.
“At the time, people didn’t know what mags were. There was a demand, but they did not know what it were and only the few understood [what alloy rims were],” Rojas said.
But in the Philippines, alloy rims were slowly gaining popularity, thanks also to the company that assembled Mitsubishi vehicles in the country.
”At the time, our volume was maybe 3,000, 4,000 pieces per month. We had already Mitsubishi then. Our first OEM [original equipment manufacturer]customer ever, ever was Mitsubishi,” Rojas said.
A vehicle needs four units of alloy rims.
“In fact, they [Mitsubishi] were the first to have alloy wheels [in the Philippines]. What car? The Celeste. Then the Galant,” he added.
The first rims sold for the after-market that were produced by PAWI carried the Rota-Italia brand. The company employed about 50 people during its first years of operation.
Officially, PAWI’s ownership was split between the Rojas family and FPS, the company of Pedrini. But after the assassination of former Sen. Benigno Aquino Jr. on August 21, 1983, FPS exited PAWI because of the economic downturn that followed.
“It [business]wasn’t brisk, but it wasn’t bad. It was okay. Then in 1983, sales became weak,” Rojas said.
Surviving the dark days
After the assassination of Aquino, Mitsubishi was left manufacturing only one model that was the box-type Lancer. Demand for brand new cars also fell because of political uncertainties.
“Until 1989, those were dark days,” Rojas said, adding monthly production fell to 2,000 to 3,000 units per month.
Also, the payment for the rims used in the Lancer were remitted to PAWI only after a Lancer was sold by a Mitsubishi dealership.
“At the dealers, there was a separate invoice [made]for PAWI for the alloy rims. That was how dark business then,” Rojas said.
But in 1989, the car industry was reborn, signaling better times for PAWI.
“In 1989, we got Toyota, the Corolla ae92 small body [to supply its rims]. At its peak, during 1990s, we reached about 40,000 to 45,000 units a month production, even 50,000,” Rojas said.
PAWI also continued supplying rims for Mitsubishi vehicles, and got contracts to export to the Toyota operations in Dubai and Israel. The company was also manufacturing rims for clients that put their own labels on them.
But even with increased production from an expanded customer base, PAWI found itself in a situation where it was not earning reasonably.
“At one point, things became difficult for us, what’s happening was because we were chasing volume, the profit became small, including for export,” Rojas said.
“We were already working for them, for our clients. It was them who were earning, we were no longer earning,” he added.
Downsizing and branding
The 1997 Asian financial crisis also affected vehicle sales in the Philippines and the region.
“Of course, the economic crisis in 1997 happened and another one in 2000. So we downsized,” Rojas said.
He added that it was after 9/11, or the terrorist attack on the World Trade Center twin towers in New York City on September 11, 2011, that he decided to downsize PAWI’s production.
Before downsizing its production, PAWI was exporting 15,000 rims a month and another 20,000 units a month were sold to car assemblers in the Philippines. The after-market in the country accounted for 7,000 rims a month.
During the years when PAWI’s production was over 40,000 units, its workforce numbered about 700.
“So we decided to promote our brand Rota and we decided to downsize,” Rojas said.
“Actually, it was better in that sense, because we were able to market our brand. We were no longer doing private labels. We were able to cut the middlemen. So we go straight to our distributors,” he added.
Today, PAWI’s production is from 18,000 to 20,000 pieces per month with 60 percent shipped to select markets abroad. The balance is for some local car assemblers and the after-market segment in the Philippines.
“We have a big presence in the [United] States, we have a big presence in the UK, Australia, New Zealand also, Singapore. Thailand also, we are okay there. These are the countries that are continuous [when it came to monthly orders],” Rojas said.
“We have others [markets]ordering every other month, not every month,” he added.
It is only in the United States that PAWI has an office. In the rest of its foreign markets, the company has authorized distributors.
The target market of Rota alloy rims outside the country cannot be belittled because it is made up of the after-market that is not at the low-end.
“It’s the middle upper [market], our customer base are usually Lancer Evos, [Subaru Impreza] STi, Nissan 370s. We do a lot for the BMW 3 series. It’s a good market,” Rojas said.
For the Philippine after-market segment, PAWI supplies 2,000 rims per month.
Rojas, who first joined PAWI as its marketing head in 1995, said the company currently employs 180 workers who are no longer in a difficult situation like in the 1990s.
“My people are no longer in a difficult situation, it’s really a better scenario now,” he added.
Rojas admitted, however, that manufacturing an automotive product or part and selling it is not easy.
“Manufacturing is not an easy job. Not only do you need to sell it, but you need to make it,” he said.
But beyond what he learned from the Ateneo de Manila in college and the University of San Francisco for his MBA, it is obvious that Rojas’ love for cars keeps him going in the business of designing, manufacturing and marketing alloy rims.
“It’s [alloy rim business]very viable, but there are ups and downs,” Rojas said.
“It’s really the love for cars,” he added.