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American Classic looks to OE sales for growth

Published March 3, 2016

TAIPEI, Taiwan (BRAIN) — The venerable aftermarket wheel brand American Classic is looking for growth through an original equipment program it has launched. The company, which has its own factory in Taichung, Taiwan, announced the program at this week's Taipei Cycle Show, with an eye at selling wheels, hubs and rims for 2018 and 2019 model year bikes.

The 34-year-old company has previously sold its hubs on an OE basis to wheel makers including Stan's, but otherwise has never really had an OE program, said AC's general manager, Ellen Kast. 

American Classic is showing a new line of OE wheels, rims and hubs specifically designed for the OE market at the Taipei show. Graphics on the rims and hubs are more conservative than American Classic's aftermarket offerings, with a laser-etched logo on the hubs and a small American Classic sticker on the rims. For bike brands that like the "matchy-matchy" look, custom graphics colors will be available for an upcharge, Kast said.

She said the OE parts are aimed at bikes selling at "the lower part of the midrange" of the market. 

At the heart of the new OE effort is a new hub that company founder Bill Shook designed specifically for OEMs. The hub features four fully sealed steel bearings and the company's own steel cassette body. To save cost for the OE market, the new hub has a two-pawl cassette system with 74 engagement points, instead of Shook's more sophisticated six-pawl design, a key feature of American Classic's aftermarket hubs. The hub weighs 250 grams.

The new OE hub will be available in six-bolt or Centerlock disc rotor mounts or in a rim brake version. A SRAM XD Driver version will be available soon.

Aside from the hubs, the program includes a variety of OE-specific rims. It includes mountain bike rims in "good," "better" and "best" quality levels, with the best rim category including two models: one that is 34mm wide externally and one that is 38mm. American Classic also will offer good, better and best rims for 700c disc-brake wheels for gravel, cyclocross or road, and two quality levels for 700c rim brake wheels.

Kast said the OE rims generally have thicker walls than the company's superlight aftermarket models, to save production costs and better suit heavier riders. Some of the OE rims are variations of previous American Classic aftermarket rims, while others are new designs. OE wheels will be built at the company's Taichung factory; all will be hand finished. 

Kast said the OE effort has been a big investment for the relatively small company, and of course OE sales will be lower margin than aftermarket sales. For those reasons, she said the program is a bit of a gamble. But she said OE sales are necessary for the company to stay vital in a tough market, which Kast expects to get tougher in the coming years. 

"The industry is going through a dark period and it will get darker before we get through this tunnel and see the light on the other side," she said. But she said American Classic can weather the coming challenges and is well positioned to work with the lower OE margins. 

"We are doing it because we can," she said. "Because we don't have huge marketing budgets and we don't have debt, we can afford to do this and we will come out the other side of this dark period intact."

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