Brakes and axles may just be the least visible components on towable products, but a German-based manufacturer is doing its best to attract more attention to them. It’s an effort the president of AL-KO Kober Corp. believes will benefit his customers and his company.
Yet AL-KO isn’t banking on fancy marketing alone to boost its market share. It’s also set to offer RV manufacturers more innovation than what’s been available in the past.
“The ‘AL-KO Advantage’ is basically a strategy we’ve been implementing in North America over the past 18 months to create new advantages that help our customers sell more trailers,” says Tim Kuppler, an automotive industry veteran who’s been at the AL-KO helm for almost two years. “The new products and manufacturing processes are probably a bigger part of that overall strategy.”
AL-KO is working to expand its market presence from its corporate offices in Elkhart, Ind. Photos by Steve Toepp/ Midwest Photography
A part of that effort, he says, is getting a handle on what its competitors are selling today.
“We’ve had benchmarking activities where we bring in all the competitor’s brakes and axles and do detailed analysis on them so the new product we’re creating is something that’s actually an advantage in the market and goes beyond what other manufacturers are doing,” Kuppler says. “The product line’s been pretty standard for over 25 years. That plays to the advantage of the market share leaders, as well as those trying to import similar or copies of the same product, so we’re trying to take the market in a new direction it could’ve gone before but maybe wasn’t in the best interests of those suppliers.”
Offering Increased Product Value
Ultimately, AL-KO – founded in Germany in 1931 by Alois Kober – is trying to provide more value and quality to the customer base by looking at alternate designs, he says, that weigh less than existing ones.
“That’s especially true in the RV market, because if we can get the weight savings while having the same or better performance then it’s a real benefit for everybody involved,” Kuppler says.
For example, one axle model in the company’s recently introduced line of Advanced Design offerings features a 29-pound savings per assembly over previous designs. It’s an obvious benefit that will give more freedom to the towable manufacturer using the product and it represents, according to Kuppler, just one facet of the AL-KO Advantage.
“When you look at bringing forward the new 3,500-pound axle and the new 5,200-pound axle, new auto-adjust brakes and other improvements – combined with our parts program that also includes a lot of marketing and consumer education for dealers and end users, we’re really trying to make a big move in the marketplace – to get the name recognition out there,” he says. “We’re building on our history and this year is our 80th anniversary, as well as marks our production of 25 million axles. There’s no one in the world that measures up, from an experience standpoint, to what the history of AL-KO brings to the table.”
Another example, Kuppler says the company, which entered the U.S. market in 1984 and purchased Hayes Axle in 1996, is focusing on a dealer-oriented parts program.
AL-KO proudly touts its Advanced Design Benchmarking in corporate signage. The company recently introduced one model in its line of Advanced Design offerings that features a 29-pound savings per assembly over previous designs.
“What we’ve done is try to put together a full program for them. It includes complete 4-foot and 8-foot displays of totally redesigned packaged product for brakes and axles, but we’ve gone beyond just the products and displays to also provide a complete marketing package of banners, toppers, window clings, and a service guide DVD,” he says. “It gives guidance about how to perform some of the basic axle and brake maintenance.”
The driving force behind AL-KO’s motivation to change itself and the market didn’t come from within, Kuppler admits, but from outside the company.
“It was very clear feedback from customers that the AL-KO name wasn’t known as well our competition and that we needed to have a real comprehensive program in order to improve our brand recognition and highlight the differences in what we’re trying to bring to the market versus others,” he says. “It was definitely a very planned program that was driven by customer feedback that we needed to improve our support to the end user.”
Selling the Quality Assurance Process
Kuppler is keen on convincing customers of AL-KO’s quality assurance processes.
“When people buy replacement parts, they don’t know they’re getting the original manufacturer’s products that’s gone through any testing,” he says. “You have a feeling, maybe with automotive replacement parts, that they may meet a certain standard, but you definitely don’t know from a trailer product standpoint. Even a lot of our competitors’ parts are being packaged through third parties, so you don’t even know which is a manufacturer’s product or some import that’s gone through zero testing.”
It’s a critical point that needs addressing, according to Kuppler, so the company’s dealer support materials stress the importance of its products to towable safety. To ensure its parts work, AL-KO puts a big emphasis on testing.
That’s where a former Studebaker test track in Indiana comes in, he says, so AL-KO is regular visitor to the Bosch Automotive Proving Grounds New Carlisle Test Facility near South Bend.
AL-KO employees work on axles on the production line. The company this year celebrates 80 years in business and also marks its production of 25 million axles.
AL-KO uses state-of-the-art equipment to make its axles and brakes. It also employs rigorous testing in order to make sure those products live up to expectations.
“There are certain standard test routines that are followed when it comes to certifying brakes in real-life situations,” he says. “What we try to do with some of our test practices – whether it’s our bench testing with a dynamometer that simulates some of those real-life circumstances or the actual standards we use when it comes to testing at the test track – is try to go beyond what other manufacturers would do to certify their products, so we’re absolutely certain they’re high quality and they’re going to hold up under the end user demands.”
Of course, AL-KO does plenty of bench testing, too, he says, a function now taking place in a new laboratory at its U.S. headquarters in Elkhart, Ind.
“We’ve been testing all of our new Advanced Design products in that lab. It’s a key part of the process going forward,” Kuppler says. “It’s actually the last step in a consolidation of manufacturing in other facilities in Elkhart that’s taken place in the last two years. We first moved our machining business, where we machine all our brake hubs and drums, to Elkhart.”
That was followed by the relocation of AL-KO’s slide business (the former RBW Industries facility) from California 18 months ago, then the recent move of its lab from Oklahoma. The final step was centralizing the IT department in February. Such a massive undertaking, he says, had several advantages.
“There was definitely some cost savings involved just with the consolidation of all this work close to our headquarters here. We’ve got a complex of three buildings in the same area and it just makes management of things a lot easier,” Kuppler says. “Obviously, it’s less freight when we’re talking about hubs and drums and slides and other things, so it helps on that front also. Having the test facilities close to all the engineering and manufacturing and other work is also a big benefit, as is, of course, having everything close to all the RV manufacturers.”
RV Market a Growing Business Segment
The RV industry comprises less than 35 percent of AL-KO’s business; the rest is occupied by cargo, utility and livestock customers, but Kuppler says the company is gaining market share.
“We’re basically assuming flat market growth, but we’re gaining substantial share from our current customers as well as new customers because, especially when it comes to the RV market, we feel this combination of lighter weight product that performs at or better than what’s out there now sells itself pretty easily,” he says. “We think there’s a lot better chance for the RV segment to grow even faster than some of the others because the weight savings probably means a lot more in the RV market than some of the others.”
AL-KO employees pay close attention to detail in their jobs in the manufacturing process. Although the RV industry only accounts for about 35 percent of the company’s business currently, AL-KO has plans to significantly increase its RV business moving forward.
Product improvements are one way AL-KO is seeking to gain customers. Still another strategy is to convince customers of the company’s quality assurance process.
Kuppler is confident AL-KO’s sales growth among RV manufacturers will reach at least 20 percent, a bold statement in such an economy, but one he stands by.
The company, which has spent several million dollars on machining investments and hired more than 25 employees to handle the expected demand, is taking its “Quality for Life” improvement initiative seriously.
“We’ve been upgrading our processes in a number of ways to improve quality so one of the most serious quality issues you can have is a spindle weld problem on the axle,” Kuppler says. “There’ve been recalls in the industry for this type of problem and basically this weld vision system is utilized to make sure we’ve got a high-quality weld and the setup is proper 100 percent of the time.”
AL-KO implemented the system last year in Oklahoma and is in the midst of executing it in Elkhart during the next few months, he says. It can’t come quickly enough; the company is due to produce 350,000 axles in 2011, a 20 percent increase over 2010’s production rate.
Eyeing Growth Opportunities
Next on Kuppler’s list of growth areas is its slide business.
“It’s probably growing at a slower rate because we haven’t brought as many new products to the marketplace. Slides have been packaged in a big way with frames and AL-KO exited the frame business a year and a half to two years ago,” he says. “It has been growing and we’re looking to that area – which we call metal fab because it includes slides, trays and some other fabricated products – to really focus on from a new product standpoint and expect it to grow at a faster rate going forward.”
While Kuppler is adamant AL-KO will keep its brake and axle work focused on towable products, he doesn’t rule out metal fab work in the motorhome business. He also says acquisitions are still possible, too.
“We’re the largest frame supplier in Europe and have the lightweight frames in many other products, so now that we feel we’ve got our core products moving in a very positive direction, we’re definitely looking at and open to acquisitions,” he says. “We’d be really looking for companies whose core philosophy fits ours when it comes to quality and loving to create the new and different.
“We’re not about trying to just acquire new technology and then that’s our source of growth from a new idea standpoint. We want to have similar philosophies and then integrate them with ours so we can make progress quickly.