Manufacturer shifts into high gear, capitalizes on ATV market.

Wherever there are oversized ATV tires, humongous lift kits or heavy horsepower racing engines, there will be stress-worn parts and broken axles.

Two Sudbury business partners have stepped in to fill a vacuum in the ATV and racing market where none has existed before by producing high performance axles.

Since starting their shop in 1998, Rob Jones and Tony Macoritto, the two co-founders of Axle System Inc., have been manufacturing constant velocity (CV) drive axles for front wheel drive cars and light duty trucks.

Working out of a cramped Alder Street garage, tucked behind Northern Breweries on Lorne Street, the partners believe they are one of a handful of companies in Canada that produces high-performance axles for the ATV market.

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They take old, broken or stock axles and produce a beefed up replacement made of high strength alloy steel for ATV and off-road vehicles with larger CV joints, bigger bearings and a stronger cage.

"We've been flooded," says Jones, adding that the ATV market took off for them last year. Business has been so good that Jones and Macoritto are moving their entire shop into larger digs on the second storey of their building this September and are planning to add at least two more employees to handle calls. "We can't even stop to answer the phone anymore."

Macoritto, who worked at a wrecking yard in Hanmer for 12 years, has been in the business since 1986 rebuilding constant velocity drive axles and selling them to garages and parts stores in town. Bigger national part suppliers muscled in the action trying to undercut them and the market went limp.

"There was no money in re-built axles; it was a total loss."

They had been rebuilding ATV axles, but never modifying them. So they began developing their own product about three years ago by improving on stock parts by making a tougher joint they say is 25 to 50 per cent stronger than the original.

"We use the best of the best to make the best," says Macoritto.

They know of only one other shop, in Louisiana, that does this for ATVs.

"We make it bigger, stronger so it can handle the bigger tires," says Jones. "The ATV industry is growing in leaps and bounds right now."

"The whole business of constant velocity is core exchange. You bring me only old axles or buy old cores and (we) fix them," says Jones, "that's what we've been doing for five years and Tony's been doing that since 1986."

Get a core, add parts to remanufacture the unit, box it and get it out the door to the customer, he adds. With ATVs there are no cores, says Jones.

"You can't get an old axle, but people want to buy it so we had to produce it."

They teamed up with a Sudbury machine shop, BBT Machining Inc., who is making all their parts for them, but Axle System has plans in the near future to produce their own stubs, splines and bars.

"We make it bigger and badder," says Macoritto. "With bigger bars and bigger heads."

To finance their expansion they plan on selling shares in their private company.

"The growth potential is unlimited with ATVs," says Jones, who estimates they have modified "hundreds" of ATV axles in the past year, shipping about 75 per cent to the U.S. and the rest to southern Ontario and western Canada. "Whatever I make, it goes out my door. I can't make it fast enough for these people."

The pair are also making inroads into the sport racing market, making custom-made racing shafts after they discovered a Web site for an American drive shaft shop that was manufacturing speed and custom axles, charging big bucks, "$250 (US) a shot," which piqued their interest.

At the same time, Macoritto visited race tracks at Grand Bend and St. Thomas in southern Ontario talking to mechanics and parts buyers about where axles on import cars and sport compacts were breaking and how they could be improved upon.

"I took a look at what they had on the vehicle and said, "I could do that." And I did. We created an axle and it's been working for us."

They produce a custom-built performance drive axle for street and extreme rally racing for cars up to 500 and 600 horsepower.

With little time to advertise or market their product, they are relative unknowns in racing circles, but they know there is a market for their product since they keep finding their axles in race cars, in magazines advertisements and at car shows.

"There's all kinds of stuff we haven't touched yet. Motor sports, rally cars, exotic cars, anything with a driver with independent rear suspension is a market for us," says Macoritto, whose shop is a sponsor for Paul Bwand, one of the fastest compact car racers in Canada.

Although the pair ships their product through a Toronto distributor, they have plans to eventually eliminate that relationship and sell directly to the U.S.

"The ATV line is big bucks, but specialty is where the money is," says Macoritto. Car axles run about $90, ATVs are $400 and upwards, but racing axles are more than $1,500 (US). "Big bucks; that's why we're specializing.

"We've done specialty stock, ATV stock, we've gone into racing stock," says Macoritto. "The sky's the limit. Where do you want to go with this? Everything's front-wheel drive now, even hydrogen cars.

"It's growing like crazy right now, the potential is so huge, it's just a matter of going and getting it," says Macoritto, who plans on spending more time on road next year finding more customers and developing other custom-built accessories once they hire more employees. "Then this business will take off like a rocket."

www.axlesystem.com

By IAN ROSS

Northern Ontario Business