CHICAGO Superior Industries International Inc.s profits dipped in the first quarter of 2013 compared with the year-ago period as labor and supply costs affected results.
Costs related to new wheel development were also higher than they were last year, the Van Nuys, Calif.-based aluminum wheel maker said in commentary released with earnings data May 3.
Superior reported net income of approximately $4.9 million in the first quarter of 2013, down 26.9 percent compared with net income of roughly $6.7 million in the year-ago quarter, despite sales increasing nearly 2 percent to about $206.4 million.
The company is struggling to keep up with demand from the automotive market, chairman, chief executive officer and president Steven J. Borick said.
"Ongoing strength in the auto market, combined with Superiors capacity limitations, continue to create operating challenges, especially at our largest manufacturing facility in the U.S.," Borick said in a statement.
The company is aiming to improve its existing operations, speed capital investments and boost capacity with a new plant in Chihuahua, Mexico, Borick said. "We are confident these investments will enable us to pursue growth opportunities afforded by the strengthening automotive sector," he said.
In April, Superior announced plans to build the new aluminum wheel manufacturing plant in Chihuahua. The company said it planned to invest between $125 million and $135 million and produce 2 million to 2.5 million wheels per year (amm.com, April 16).
Superior currently produces 12.5 million wheels per year, and the new plant is expected to initially boost the companys capacity by 15 to 20 percent, Borick said.
Construction on the Mexican facility is expected to be completed in mid-2015, Superior said May 3.