SUPERIOR INDUSTRIES INTERNATIONAL INC, 10-K, 1996-03-29

SUPERIOR INDUSTRIES INTERNATIONAL INC
10-K, 1996-03-29
MOTOR VEHICLE PARTS & ACCESSORIES

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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)

For the Fiscal Year Ended December 31, 1995

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

For the transition period from ___________ to ___________

COMMISSION FILE NO. 1-6615

SUPERIOR INDUSTRIES INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

CALIFORNIA 95-2594729
---------- ----------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)

7800 WOODLEY AVENUE, VAN NUYS, CALIFORNIA 91406
- ----------------------------------------- -----
(Address of Principal Executive Offices) Zip Code)

Registrant's telephone number, including area code (818) 781-4973

Securities registered pursuant to Section 12(b) of the Act:

COMMON STOCK, PAR VALUE $0.50

REGISTERED ON THE NEW YORK STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this form 10-K or any
amendment to this Form 10-K. / /

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes X No
----- -----

28,886,029 shares of common stock were outstanding as of March 18,
1996.

Aggregate market value of voting stock held by nonaffiliates of
registrant was $538,228,465 on March 18, 1996.

The following documents are incorporated by reference and made a part
of the Form 10-K:

1. Registrant's 1995 Annual Report to Shareholders (Parts I, II and
IV)

2. Registrant's Proxy Statement for its Annual Meeting of
Stockholders to be held May 17, 1996 (Part III)

Listing of Exhibits - Pages 20-22

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PART I

ITEM 1. BUSINESS

GENERAL DEVELOPMENT OF BUSINESS

Superior Industries International, Inc.'s (the "Company" or the
"Registrant") principal business is the design and manufacture of cast aluminum
road wheels for original equipment manufacturers (OEMs). It also designs and
distributes a variety of products for the automotive aftermarket, including
custom road wheels and accessories. The Registrant was initially incorporated
in Delaware in 1969 and reincorporated in California in 1994 as the successor
to three businesses founded by Louis L. Borick, which had been engaged in the
design, manufacture and sale of automotive accessories and related products
since 1957.

Recent developments in the Company's business are described in the
Company's 1995 Annual Report to Shareholders ("Annual Report") which is
incorporated herein by reference.

FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS

The Company manages its business on an integrated one-segment basis.
Information relating thereto has been included in Note 8 of "Notes to
Consolidated Financial Statements" in the Annual Report which is incorporated
herein by reference.

NARRATIVE DESCRIPTION OF BUSINESS

Principal Products

The Registrant's products are divided into two categories:

1. OEM - Cast Aluminum Road Wheels (93.1 percent of net sales)

2. Aftermarket - Custom Road Wheels and Automotive Accessories
(6.9 percent of net sales)

The Company's net sales for these product lines for 1995, 1994 and
1993 are included in the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" section of the Annual Report which is
incorporated herein by reference.

OEM - Cast Aluminum Road Wheels

The Company's entry into the OEM road wheel business in 1973 resulted
from its successful development of manufacturing technology, quality control
and quality assurance techniques which enabled it to satisfy the quality and
volume requirements of the OEM market. The Company's OEM cast aluminum road
wheels are sold to The Ford Motor Company ("Ford"), General Motors Corporation
("General Motors"), Chrysler de Mexico, several Japanese manufacturers,
including Toyota Motor Corporation ("Toyota"), Mazda Motor Corporation
("Mazda"), Nissan Motor Corporation Ltd. ("Nissan"), Fuji Heavy Industries,
Ltd. ("Subaru"), and Isuzu Motors Limited ("Isuzu"), and two European
automotive manufacturers, Bayerische Motoren Werke ("BMW") and Jaguar Cars Ltd.
("Jaguar") for factory

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installation as optional or standard equipment on selected vehicle models. As
discussed below, there are several advantages to manufacturers, dealers and
consumers by installing cast aluminum wheels which help promote this product's
success. Consolidated net sales in 1995, 1994, and 1993 were to principally
two major automotive manufacturers, Ford and General Motors.

During the past twenty-two years the Company has provided cast
aluminum road wheels to Ford, General Motors, Chrysler and, beginning in 1989,
Japanese auto manufacturers for an increasing number of vehicle models, from
eight models in 1980 to 156 currently. It has been the Company's experience
that once the manufacturer has ordered the Company's cast aluminum wheels for
use on a particular year's model, the Company's wheel will be included in that
model's production in later years as well. In addition, the number of vehicle
models on which the Company's aluminum wheels are standard equipment has
increased from none in 1980 to 48 in 1995.

Demand for OEM cast aluminum wheels such as those manufactured by the
Company has been increasing. Ward's Automotive, an industry publication,
reports that the installation rate of such wheels for domestic cars rose from
approximately 4 percent in 1980 to 31 percent for the 1990 model year then to
almost 44 percent for the 1995 model year. Aluminum road wheel installation
rates for domestic light trucks and utility vehicles jumped from approximately
24 percent for the 1990 model year to almost 43 percent for the 1995 model
year. This growth in aluminum wheel installation rates has taken place while
the automotive market has been cyclical.

The Company believes that the increased use of cast aluminum wheels on
domestic vehicles is due to several factors. The aesthetic appeal of cast
aluminum wheels has fueled customer demand. Aluminum wheels typically weigh
less than conventional steel wheels and this weight savings contributes to
increasing the vehicle's fuel efficiency. Because the federal government
requires each domestic manufacturer's total annual production to meet certain
minimum fuel efficiency levels referred to as "CAFE" (Corporate Average Fuel
Economy), the Company's customers have sought to meet these levels in part by
reducing the weight of their vehicles. The installation of cast aluminum
wheels achieves this objective. Manufacturers and dealers also benefit from
the installation of aluminum wheels on their models because of higher profit
margins. Aluminum wheels contribute to the road handling ability and ride of a
vehicle because of the weight savings to critical suspension areas and because
of the greater precision achieved in manufacturing aluminum wheels over
conventional steel wheels.

With approximately 89 percent of the Company's 1995 sales made to Ford
and General Motors, the Company is dependent on these two significant
customers. The Company does not believe this represents a material risk due to
the following factors. First, in 1993 the Company was awarded a new five-year
contract with Ford. The contract, which expires in 1998, replaces previous
long term contracts and covers passenger cars, light trucks and utility
vehicles. This relationship should result in the Company continuing to be
Ford's primary aluminum wheel supplier. Second, in 1995, the Company signed a
"lifetime" contract with General Motors which extends from January 1, 1996
through December 31, 2000 and pertains to the "lifetime" of all current models.
In addition to securing all current models the contract also appoints the
Company to be the chosen supplier for all replacement wheels. Accordingly, the
Company should be awarded a significant portion of General Motors overall
aluminum requirements. Additionally, the Company has proven its ability to be
a consistently low-cost producer of quality aluminum wheels with the capability
of quickly expanding production capacity to meet increasing customer sales
demands. This has been evidenced not only through the Company's rapid plant
expansion program, but also through the

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Company's demonstrated ability to meet frequent customer requests to absorb
additional capacity requirements. The Company strives to continually enhance
its relationships with its customers through continuous improvement programs.
These factors have resulted in the Company's market share expanding to
approximately 40 percent of the domestic aluminum road wheel market. Moreover,
the Company ships over 150 different wheel models to Ford and General Motors
indicating the broad usage of the Company's wheels throughout both OEM
customers' product lines. Finally, both Ford and General Motors continue to
rank the Company as their highest rated supplier of cast aluminum road wheels.

The Company's long-term strategy involves broadening both its domestic
and international OEM customer base and expanding its product lines into
complementary areas which will utilize the Company's manufacturing expertise.
The Company has embarked on a strategy to develop and penetrate three new
international markets: Japan, Europe and Latin America as well as related
foreign OEMs with manufacturing facilities in the United States.

The Company's first step towards achieving this goal was to explore
and develop relationships with Japanese OEMs. In pursuit of this objective,
during 1989 the Company announced it had, in conjunction with Topy Industries,
Limited ("Topy"), Japan's largest wheel manufacturer, obtained its first order
with a Japanese OEM from Mazda. In 1990, the Company further penetrated this
market by receiving a contract from Toyota. Also in 1990, the Company
increased its marketing efforts into this area by forming a sales and marketing
joint-venture with Topy. The joint-venture, named Topy-Superior Limited
("TSL"), markets and sells wheels made by the Company to Japanese OEM customers
both in Japan and the United States. Since inception, the Company, through
TSL, has received many new contracts to manufacture wheels for domestic
Japanese OEMs as well as for three of their U.S. operations. In total, TSL has
contracts with five Japanese OEM customers. This venture is one key step
forward in the Company's international marketing efforts and the Company
expects continued sales growth from this venture.

A second step in the Company's international marketing efforts was
achieved in 1994 as the Company successfully entered the European marketplace
by obtaining two new customers. The Company was awarded a contract by Jaguar
to supply wheels. The wheels are manufactured in the United States and
exported to the United Kingdom. In addition, the Company received a contract
with European based BMW, to supply wheels for the new BMW roadster convertible.
Shipments began in 1995 to BMW's new plant in Spartanburg, South Carolina.
Moreover, in 1995, validating BMW's high regard for its quality and production
capabilities, the Company was awarded five additional wheel programs by BMW for
shipment to the Spartanburg plant as well as export to Germany.

Further in pursuit of developing its ties to the European market, the
Company in 1995 entered into a 50-50 joint venture with German based Otto Fuchs
Metallwerke ("Otto Fuchs") to establish a European manufacturing presence. The
joint venture, known as Suoftec Light Metal Products, KFT ("Suoftec") will
produce both light weight forged and cast aluminum wheels for sale to European
OEMs. Construction of the building began in the fourth quarter of 1995 and
initial shipments are slated to begin in January 1997. The facility, located
in Tatabanya, Hungary, a country with low labor and production costs and
available labor force, establishes the Company's commitment toward entering the
European market. The facility is located in close proximity to large European
OEMs and will bring new wheel making technology to the Company for use in
European and U.S. markets.

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Demonstrating OEMs' interest in this new light weight forging
technology, Suoftec received a long term contract from a major European OEM
calling for 700,000 wheels per year. The contract represents over $30 million
per year in revenues and represents almost half of first phase capacity of 1.5
million wheels per year. The Company anticipates receiving additional orders
in 1996.

Development of the Company's initial Latin American program commenced
during 1994 with the first shipments from the Company's Chihuahua, Mexico
plant. Relative to this market, the Company received orders from Ford and GM
and renewed its relationship with Chrysler by receiving orders to produce two
wheel models from Chrysler de Mexico for the 1995 and 1996 model years. The
wheels are produced at the Chihuahua, Mexico facility for installation on
Mexican-manufactured cars built for the Mexican market and for direct export
back to the U.S. Prior to the devaluation of the Mexican Peso (see
"Management's Discussion and Analysis of Financial Conditions and Results of
Operations" section of the Annual Report which is incorporated herein by
reference) the Mexican market was growing rapidly and major automotive
manufacturers were increasing production and adding capacity. Subsequent to
the devaluation, this expansion activity in the domestic Mexican automotive
industry has slowed. However, management still views the long-term prospects
of this market positively and, moreover, has held discussions with OEMs
regarding new and expanded export activities from this facility.

While non-domestic contracts are small in relation to domestic
original equipment contracts, they are nonetheless significant for the growth
of the Company by geographically diversifying and expanding its global
presence. The Company will continue to focus its efforts on new global markets
as they become the fastest growing segments of its business.

In 1994, in response to the steadily growing popularity of
chrome-plated cast aluminum wheels and to provide capacity for several new
customer orders, the Company completed construction of a new chrome-plating
wheel facility. The Company is the only OEM aluminum wheel manufacturer to
develop this in-house capability and the plant is the largest of its kind in
the world. This facility was, as of December 31, 1995, in a start-up mode.
The plant represents the Company's commitment toward diversifying into new
product lines complementary to its core business (See also "Manufacturing").

Aftermarket

The automotive aftermarket consists of products sold to vehicle owners
as replacements for, or additions to, OEM equipment to enhance the comfort,
safety, style, design and performance of vehicles such as passenger cars,
pick-up trucks, vans, recreational and off-road vehicles, light motor homes and
boat trailers. The Company designs, manufactures and distributes 61 different
product lines including 3,200 part numbers of custom steel, aluminum and
chrome-plated steel and aluminum road wheels and accessories, including
steering wheel covers, lighting products, suspension and other accessories for
this market. The Company's Sport Grip(R) steering wheel covers have been
highly successful over the years and have achieved national recognition.

Since 1991, aftermarket net sales, excluding the impact of the August,
1993 divestiture of the Canadian aftermarket mirror and light business, which
marketed products under the trade name "Do-Ray", have experienced a compounded
5.1 percent growth rate. This rate of growth was diminished in 1995 as sales
declined as soft economic conditions reduced customer order levels. The
Company has experienced growth in the roadwheel product lines, specifically,
stylized aluminum and chrome-plated aluminum wheels

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sold under the "Streetwear" trade name. The success of the "Streetwear" line
of wheels reflects the Company's strategy with regard to growing this product
line. Generally, this approach entails the identification of strategic
geographic markets throughout the United States and the development of key
alliances with distributors who maintain extensive lines of distribution within
those markets. Simultaneously, new styles of aluminum and chrome-plated
aluminum wheels with mass market appeal were successfully developed and
introduced to the product line. Strong consumer response to new wheel styles
has spurred further development of new wheel programs. The Company expects
continued growth in this product line as new wheels are developed and
introduced to our existing distributor base.

In 1993 and 1994 the general line of aftermarket accessories has
experienced modest sales increases as a result of a stronger economy and new
product introductions. This trend was broken in 1995 as high customer
inventory levels accentuated by a soft economic environment reduced orders.
The aftermarket general accessories line continues to be negatively impacted by
ongoing retail market contraction and intensive market competition. The trend
of manufacturers to incorporate more accessories as original equipment when
vehicles are sold has also impacted this business.

The Company is a major aftermarket road wheel and accessory supplier
to companies with multiple retail outlets such as Autozone, Pep Boys, Canadian
Tire, Wal-Mart, Northern Automotive (Schuck's, Checker, Kragen), Western Auto,
Paccar Automotive Inc. (formerly General Automotive/Grand Auto), NAPA and
Discount Auto Parts. The Company also supplies major tire distributors such as
Les Schwab, Interstate Tire Corp.(ITCO), Belle Tire, and other wheel and
performance distributors.

Manufacturing

The Company believes that its ability to efficiently process raw
materials into finished goods has enhanced its competitive position as a
manufacturer of OEM products. The Company's manufacturing capabilities also
enable it to manufacture and assemble many of the products it sells in the
aftermarket.

The manufacture of cast aluminum wheels, in which aluminum ingot is
melted, cast, de-sprued, heat treated, painted or chrome-plated, machined,
clearcoated and packaged, is performed entirely at the Company's facilities.
The Company employs low-pressure casting, a process which the Company believes
is the most efficient process for high volume, high quality aluminum wheels.

The Company operates six OEM aluminum wheel manufacturing facilities.
The facilities, located in Fayetteville and Rogers, Arkansas, Van Nuys,
California, Pittsburg, Kansas, Johnson City, Tennessee and Chihuahua,
Chihuahua, Mexico are recognized by the Company's customers as "world class"
manufacturing plants utilizing state-of-the-art processes and equipment. Five
of the facilities have been constructed and brought on-line over the past nine
years beginning with Fayetteville in 1986 (with subsequent expansion in 1993
and 1994), Rogers in 1988, Pittsburg in 1991, Johnson City in 1992 and
Chihuahua in 1994. Chihuahua began shipping wheels in the beginning of the
third quarter of 1994.

Implementing the Company's long-term strategy of penetrating the Latin
American market, the Company is expanding its OEM wheel facility in Chihuahua,
Mexico during 1996. The plant will ultimately have the capacity to ship 1.2
million wheels per year.

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Entry into the European market, through the joint-venture with Otto
Fuchs, will be facilitated through the construction of an aluminum wheel
facility located in Tatabanya, Hungary capable of two million wheels per year.
The manufacturing process will take advantage of a new forging technology
developed by Otto Fuchs to forge lighter weight aluminum wheels, supplemented
with Superior's own light weight low pressure process. The joint-venture
expects to begin shipping wheels sometime in January 1997. The cost of the
facility, currently estimated at $70 million, will be funded through capital
contributions by each partner and long-term project financing.

As the expansion programs came to completion during 1995 two events
transpired which resulted in excess manufacturing capacity. First, the value
of the Mexican peso experienced a precipitous decline in value relative to the
U.S. dollar and the local Mexican economy entered into a severe recession.
This, in turn, precipitated two further significant events. Immediately, the
domestic Mexican automotive market evaporated, along with the market for the
Company's product in Mexico. At the same time, however, the Company's
Chihuahua, Mexico facility continued to ramp-up and ultimately became the
Company's lowest cost based manufacturing facility.

The second event was the softening of the domestic U.S. automotive
market which was accentuated by harsh winter weather conditions in 1995 and in
to 1996. Taken together, the slow-down of these two critical automotive
markets have reduced the Company's production requirements thereby creating
excess manufacturing capacity. Absent some improvements in one or both of the
U.S. and Mexican automotive markets this excess capacity will adversely impact
operating margins in 1996. Management is currently evaluating additional
strategies to minimize the impact of this situation including further expansion
of the Chihuahua, Mexico plant.

Combined with existing production capabilities, these new and expanded
facilities will bring Company-wide North American production capacity to over
12 million wheels annually.

In response to the growing popularity of chrome-plated cast aluminum
wheels, and as a result of the Company's successful development of the
chrome-plating process, the Company in 1994 completed construction of a new
state-of-the-art chrome-plating facility primarily to service the OEM market.
The facility is located adjacent to the Company's Fayetteville, Arkansas wheel
plant and shipments commenced in 1995. However, continuing technical problems
at the chrome-plating facility may impact the results of operations in 1996.
The Company is the only world-wide manufacturer of OEM cast aluminum wheels
that is developing chrome-plating capability.

The Company maintains a high level of quality assurance in the
manufacture of its products and has built and maintained a reputation as a
supplier of high quality aluminum road wheels. This reputation is maintained
by day-to-day product, process and systems audits. In addition, Company-wide
continuous improvement programs are employed to ensure competitive leadership
in all facets of the Company's business. The Company's facilities and
processes are subject to continual technical and quality review by the OEM
engineering, quality and purchasing departments. To maintain its position as a
"world class" OEM supplier and ensure all products and underlying services meet
and exceed customer expectations the Company utilizes a Total Quality
Management ("TQM") system. Optimal process performance at the lowest cost is
significantly enhanced by the use of advanced statistical analysis, such as
design of experiments and loss function analysis. Quality Functional
Deployment ("QFD") and Quality Operating

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Systems ("QOS") are elements in place that provide management with a summary of
key measurables to monitor operations and to identify and promote continuous
improvement throughout the organization.

As a result of the Company's quality, management and employee efforts,
the Company was the first and one of only two wheel suppliers in the world to
earn General Motors' highest quality "Mark of Excellence" award for excellence
in all five categories (Quality, Cost, Delivery, Technology and Management).
Ford has awarded all of the Company's domestic OEM facilities producing Ford
wheels with the prestigious "Q1" quality rating.

In 1995, Ford awarded the Company the highly coveted "Full Service
Supplier" award in recognition of its advanced design, engineering and program
management capabilities. Superior is the only OEM wheel supplier in the world
to achieve this status.

In 1994 the Company was named by General Motors as one of the elite
171 suppliers selected from a total of 30,000 companies recognized as Worldwide
Suppliers of the Year 1993. The award reflects the Company's ability to exceed
specific performance standards established by GM relative to quality, service
and price.

Marketing

Commencing January 1, 1996 the Company established a technical sales
center in Detroit and terminated its relationship with a third party
representative. The office will provide technical engineering and sales staff
in closer proximity to the Company's major customers and will enhance the
Company's already strong sales and technical resources to meet the ever
demanding requirements of its OEM customers. Sales activities in Europe are
supported by sales representative organizations. Sales activities for Mexico
are managed internally. In addition, the Company's sales and marketing
joint-venture with Topy maintains an office in Japan which adds local support
to the Company's Japanese customers. The Company believes that it has
maintained its long-standing relationships with OEMs on the basis of quality
production with timely deliveries in accordance with OEM requirements, timely
response to customer needs and competitive pricing.

A large proportion of the Company's aftermarket sales are made through
eighteen independent manufacturers' representative organizations throughout
North America. These representative organizations solicit orders from catalog
houses, department and auto accessory stores and chain stores. These
manufacturers' representatives are also supported by the Company's internal
marketing and sales organization.

In 1995, the Company had approximately 425 aftermarket accounts
operating through thousands of retail outlets. The Company's ten largest
customers in 1995 accounted for approximately 72 percent of aftermarket sales.

Net Sales Backlog

The Company receives OEM tooling purchase orders to produce multi-year
requirements for cast aluminum road wheels. These purchase orders are for
vehicle model programs that can last three to five

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years. The Company manufactures and ships based on customer firm releases,
normally provided on a weekly basis, which can vary due to cyclical automobile
production.

Customer orders for aftermarket products are normally shipped within
ten days of receipt. As of December 31, 1995 and 1994, the Company had no
significant backlog of such orders.

Seasonal Variations

The automotive industry is cyclical and varies based on the timing of
consumer purchases of vehicles and general economic conditions. Production
schedules can vary significantly from quarter to quarter to meet customer
scheduling demands. During the past few years, there has been no significant
consistent seasonal variation.

Suppliers

The Company purchases substantial quantities of aluminum ingot for the
manufacture of its cast aluminum road wheels. These purchases accounted for
approximately 80 percent of the Company's total material requirements during
1995. The majority of the Company's requirements are met through purchase
orders with several major domestic aluminum producers. Generally, the orders
are fixed as to minimum and maximum quantities of aluminum which the producers
must supply during the term of the orders, which is typically one-to-two years.
The Company was able to successfully secure aluminum commitments from its
primary suppliers at the beginning of 1995 to meet its production requirements.
For 1996, the Company has procured contracts to meet the majority of its
estimated aluminum ingot requirements.

The aluminum market over the past several years has been extremely
volatile. During 1994 worldwide production of aluminum was curtailed which
resulted in increased aluminum prices throughout 1994 and 1995. Selling prices
are adjusted for these raw material increases.

The Company obtains its requirements for other materials through
numerous suppliers with whom it has established trade relations. In instances
where outside suppliers produce components for the Company's products, the
Company normally owns the tools and dies located in the supplier's facilities,
or has the right to purchase such items.

Patents And Licensing Agreements

The Company currently holds patents for 20 of its inventions and has
six other patents pending. While the Company has a policy of applying for
patents if and when it develops new products or processes, it believes that its
success is dependent upon its manufacturing and engineering skills and the
quality and market acceptance of its products, rather than upon its ability to
obtain and defend patents.

The Company is currently licensed to use five patents owned by other
persons. Most of these licenses are for the duration of the patent and are
exclusive for the United States.

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Research And Development

The Company's policy is to continuously review, improve and develop
engineering capabilities so that advance compliance with customer requirements
are met in the most efficient and cost effective manner available. The Company
strives to achieve this objective by attracting and retaining top engineering
talent and by maintaining the latest state-of-the-art computer technology to
support engineering development. Further in pursuit of this objective and to
enhance customer relationships, the Company opened, in 1996, a technical center
in Detroit which maintains a compliment of engineering staff centrally located
near the Company's largest customers.

The Company utilizes computer-aided design, computer-aided engineering
and computer-aided manufacturing (CAD/CAE/CAM) in the design of a wheel, finite
element analysis to identify potential design problems prior to manufacturing
and three dimensional prototyping for styling evaluation. Additionally, in
1994 the Company added fluid flow and thermal analysis capabilities to aid in
molds and casting cycles at both its engineering centers in Van Nuys,
California and Fayetteville, Arkansas. By continuously improving its
engineering capabilities, the Company is able to reduce the time required to
develop a wheel and identify cost saving technologies which can be shared with
customers.

As part of the Company's on-going continuous improvement programs,
manufacturing technologies and processes are continually challenged, refined,
and enhanced to ensure the Company maintains its position as the low cost and
highest quality manufacturer of cast aluminum wheels.

Development of the Company's patented helium leak testing device for
aluminum wheels has been a breakthrough in the Company's ongoing effort to
provide the most efficient manufacturing processes and methods. These
machines, which detect microscopic leaks at a rapid rate, are currently
utilized in several of the Company's facilities. The Company is continuing to
develop new and more advanced technologies in this field. In this regard, the
Company has recently released the newest and most advanced model of the helium
leak test machines to date, the HLT- 4000. Through its wholly-owned
subsidiary, Superior Engineered Technologies, Inc., the Company has begun to
market this technology and has made limited shipments of helium leak test
machines to other companies since 1993.

Further evidencing the Company's commitment towards diversifying its
product lines and maintaining a leadership position in new technologies,
shortly after year end 1995, the Company consumated a joint venture agreement
with Aluminum Company of America ("Alcoa") to manufacture and sell a new line
of cast aluminum wheels for commercial trucks and buses in the class 3 through
8 range. Class 3 through 8 vehicles include small or medium size wholesale and
retail delivery trucks, airport-type courtesy vans, motor homes, buses and
heavy duty over-the-road tractor trailer rigs. During 1995, the Company
developed a cast aluminum wheel for this market and will manufacture wheels at
its Van Nuys facility marketed under the Alcoa name through Alcoa's existing
Wheel Division sales organization. The joint venture could serve as a basis
for the Company to expand its technology to develop other cast aluminum parts.

Through joint-ventures and development projects, technological
advances, new processes and expanded engineering capabilities, the Company is
positioning itself to become a full spectrum manufacturer of aluminum wheels as
well as other aluminum products.

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The Company is currently engaged in 37 engineering programs for the
development of OEM wheels for future model years, including several wheel
models for Japanese, Latin American and European OEM manufacturers, including 5
engineering programs for the development of chrome-plated aluminum wheels.

Reference is made to Note 1 of "Notes to Consolidated Financial
Statements" in the Annual Report which is incorporated herein by reference for
a summary of research and development costs over the past three years.

Government Regulation

Safety standards in the manufacture of vehicles and automotive
equipment have been established under the National Traffic and Motor Vehicle
Safety Act of 1966. The Company believes that it is in compliance with all
federal standards currently applicable to OEM suppliers and to automotive
aftermarket manufacturers and products.

Environmental Controls

The Company's manufacturing facilities are subject to solid waste,
water and air pollution control standards mandated by federal, state and local
laws. Violators of these laws are subject to fines and in extreme cases plant
closure. Although from time to time the Company has paid fines arising out of
asserted violations of these standards, no such fines have been material in
nature. The Company believes it is substantially in compliance with all
standards presently applicable. Compliance with environmental regulations has
necessitated changes in processes and equipment upgrades and may in certain
instances require the acquisition of "trading credits". The 1995 annual cost
of environmental compliance is approximately $1,200,000 and the Company
anticipates spending no more than $1,000,000 relating to domestic capital
expenditures for environmental equipment over the next two years. The Company
will continue on an on-going basis to modify its processes in order to maintain
compliance with federal, state and local laws. See Item 3. "Legal Proceedings"
for information concerning the Company's involvement with certain United States
Environmental Protection Agency activities.

Liability Insurance

The Company maintains liability insurance including product liability,
for limits it believes are appropriate to match the risks and exposures
inherent to the Company's business. Over the past five years, the Company has
never settled claims in excess of the coverage then in effect.

Competition

The business sectors in each of the Company's product areas are highly
competitive. The Company is the world's largest supplier of cast aluminum road
wheels for OEM installations and the Company believes it holds approximately 40
percent of the domestic market for cast aluminum road wheels for automotive
installation. Since 1980 the demand for OEM cast aluminum road wheels has
grown from approximately four percent of vehicle installations to almost 44
percent. The Company anticipated this eventuality and developed new
state-of-the-art "world class" manufacturing facilities located closer to OEM
final assembly plants. The Company believes that as a result it has become
very competitive both in

Page 11
<PAGE> 12
terms of cost and quality. The Company's primary competitor in the North
American market is Hayes Wheels International, Inc.

In the aftermarket business intense market competition has been
heightened by ongoing market contraction of major retailers and the presence of
more products manufactured outside the United States. In order to retain
valued customers, the Company has had to provide greater sales allowances to
its customers and has been generally unable to pass along timely and matching
selling price increases. These factors in the past have contributed to
diminished margins in the aftermarket business.

Employees

As of December 31, 1995, the Company had approximately 4,500 full-time
employees. At the present time approximately 80 employees at the Company's
Tijuana, Mexico maquiladora, which polishes wheels for aftermarket
applications, are covered by collective bargaining agreements.

In March 1995 the International Union, United Automotive, Aerospace &
Agricultural Implement Workers of American (the "UAW") filed a representation
petition with the National Labor Relations Board ("NLRB") seeking an election
among the production, maintenance and warehouse workers at the Company's
Johnson City, Tennessee production facility. On May 26, 1995, a secret ballot
election was conducted by the National Labor Relations Board at the Johnson
City plant to determine if employees wished to be represented by the UAW.
Employees voted 239 to 145 against representation by the UAW. In 1994, the
employees of the Johnson City plant had already voted against representation by
the same union.

ITEM 2. PROPERTIES

The Company maintains and operates 10 facilities (including an idle
facility in Oskaloosa, Iowa) located in Arkansas, California, Iowa, Kansas,
Tennessee, Puerto Rico, and Baja and Chihuahua, Mexico. The facilities
encompass manufacturing, warehouse and office space in 15 buildings with
approximately 2.2 million square feet. Six of the buildings are owned by the
Company, with the remainder operated under lease agreements expiring at various
dates through 2063.

The Company's corporate offices, manufacturing and warehousing
facilities located in Van Nuys, California are subleased from Louis L. Borick,
its President and Chairman of the Board, and Juanita A. Borick. The Company
also leases additional plant and warehousing facilities in Van Nuys, California
from Keswick Properties, owned jointly by Steven J. Borick, a director of the
Company, and two other of Mr. Louis L. Borick's children and the Borick
Building Corporation, a company wholly-owned by Louis L. Borick and Juanita A.
Borick. The Company believes that the terms of the aforementioned leases are
no less favorable than those which it could obtain from an unaffiliated party
on similar property with comparable facilities in the vicinity.

In general, the facilities are in good operating condition, have been
designed and constructed for their specific use, and are adequate to meet the
productive capacity requirements of each plant.

Page 12
<PAGE> 13
Additionally, reference is made to Notes 3 and 10 of the "Consolidated
Financial Statements" and "Notes to Consolidated Financial Statements" section
of the Annual Report which are incorporated herein by reference.

ITEM 3. LEGAL PROCEEDINGS

In 1988, the Company was notified by the United States Environmental
Protection Agency (EPA), that the Company is considered a potentially
responsible party (PRP) for costs to clean up the Operating Industries, Inc.
(OII) site because of deposits, which were permitted and approved by
appropriate regulatory agencies when made, at the site located in Monterey
Park, California. The total costs to clean up the site cannot be determined
but the EPA has informed all PRP's that such costs may exceed $500 million.
The PRP's are jointly and severally liable although it is possible that the EPA
will accept contribution according to the severity of the deposits made. The
Company's insurance carriers have been placed on notice and their insurance
policies are currently under review to determine whether the Company's
liability is covered by insurance. To date, by private agreement with the
other settling defendants, the Company has paid $461,816, net of settlements
from other parties, to settle its liability under the first three phases of
clean-up. Based on facts now known to the Company, including the low level of
participation claimed against the Company by the EPA and based on the number
and financial strength of Companies with greater participation in the cleanup
activities, management believes sufficient reserves have been established to
cover the Company's ultimate financial exposure.

On December 5, 1995, a class action complaint was filed in the United
States District Court - Central District of California against the Company and
certain of its officers and directors. The complaint is on behalf of all
purchasers of the Company's common stock during the period from March 31, 1995
through September 7, 1995. The Complaint seeks unspecified damages, interest,
attorney's fees and other costs and extraordinary equitable and/or injunctive
relief. Management of the Company believes the action is without merit and
intends to vigorously defend against the allegations in the Complaint.

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Page 13
<PAGE> 14

ITEM 4. SUBMISSION OF MATTERS TO
A VOTE OF SECURITY HOLDERS

No matter was submitted during the fourth quarter of 1995 to a vote of
security holders through the solicitation of proxies or otherwise.

EXECUTIVE OFFICERS OF THE REGISTRANT

Set forth below is information regarding executive officers of the
Company who are not directors. Information regarding executive officers who
are directors is contained in the Company's Proxy Statement issued in
connection with its Annual Meeting of Stockholders scheduled to be held on May
17, 1996 which is incorporated herein by reference (1996 Proxy Statement). All
executive officers are appointed annually by the Board of Directors and serve
one-year terms. Also see "Employment Agreements" in the Company's 1996 Proxy
Statement.

<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<S> <C> <C>
Joseph T. D'Amico 66 Vice President, Materiel
Michael D. Dryden 58 Vice President, International
Business Development
Ronald F. Escue 50 Vice President, General Manager -
Aftermarket Wheel Division
James M. Ferguson 47 Vice President, OEM Marketing Group
Morris Herstein 68 Vice President, Services
John Knott 55 Vice President, Manufacturing
Daniel L. Levine 37 Corporate Secretary and Assistant Treasurer
Henry C. Maldini 61 Vice President, Engineering
Michael J. O'Rourke 34 Vice President, Program Administration
Delbert J. Schmitz 63 Vice President, Aftermarket Marketing
</TABLE>

Joseph T. D'Amico

Mr. D'Amico joined Superior in 1981 as Director of Materiel. In 1984,
he was promoted to Vice President, Materiel. He is responsible for domestic
and international purchasing, raw materials and finished goods inventories,
warehousing, receiving, distribution, traffic and material control.

Michael D. Dryden

Mr. Dryden joined Superior in March 1990 as Vice President,
International Business Development to assist Mr. Ferguson in the sales and
marketing of products to international original equipment manufacturers. For
the prior five years, he served as the Director of Business Development,
Asia-Pacific for Kelsey Hayes Company, Aluminum Wheel Group.

Page 14
<PAGE> 15
Ronald F. Escue

Mr. Escue became Vice President, Aftermarket Sales in January 1987 and
he was promoted to Vice President, General Manager - Aftermarket Wheel division
in January 1995. He is responsible for the Company's aftermarket wheel
division including, nationwide sales, marketing and manufacturing activities.
He joined Superior in September 1975.

James M. Ferguson

Mr. Ferguson joined Superior in 1977 as an OEM Sales Engineer and
became an officer in 1984 and was promoted in 1990 to Vice President, OEM
Marketing Group. He is responsible for assisting Mr. Raymond C. Brown, Senior
Vice President, in directing the sales and marketing of products for national
and international original equipment manufacturers.

Morris Herstein

Mr. Herstein, Vice President, Services, has held this position since
1957, and is responsible for Superior's industrial relations and safety
programs. His brother-in-law, Louis L. Borick, is Superior's President and
Chairman of the Board of Directors.

John L. Knott

Mr. Knott joined Superior in 1995 as Vice President, Manufacturing.
Before coming to Superior, Mr. Knott was Vice President and General Manager of
the Norris Defense Unit of NI Industries.

Daniel L. Levine

Mr. Levine became Corporate Secretary in March 1996. He is also
responsible for overseeing the Company's taxes and assisting in the
administration of corporate treasury activities, including risk management and
credit. He joined Superior in 1990.

Henry C. Maldini

Mr. Maldini was appointed Vice President, Engineering in June 1986.
Previously he was Assistant Vice President, Engineering for the Company. He
joined the Company in 1975.

Michael J. O'Rourke

Mr. O'Rourke was appointed Vice President, Program Administration in
July 1995. He is responsible to assist in the administration of OEM sales and
marketing programs of the Company including executive oversight of the
Company's Detroit technical sales center. Mr. O'Rourke joined Superior in
1987. Prior to his promotion he held various managerial positions in the
marketing department.

Page 15
<PAGE> 16
Delbert J. Schmitz

Mr. Schmitz was appointed Vice President, Aftermarket Marketing in
January 1987 and is responsible for the marketing and sales of the Company's
entire line of aftermarket accessories. Mr. Schmitz was employed as Vice
President, Sales from 1972 until January 1987.

(This space intentionally left blank)

Page 16
<PAGE> 17
PART II

ITEM 5. MARKET FOR REGISTRANT'S
SECURITIES AND RELATED
STOCKHOLDER MATTERS

Reference is made to the "Quarterly Common Stock Price Information,"
"Financial Highlights", "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and Note 15 to "Notes to Consolidated
Financial Statements" sections of the Annual Report which are incorporated
herein by reference.

ITEM 6. SELECTED FINANCIAL DATA

Reference is made to the "Financial Highlights" section of the Annual
Report which is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Except for the historical information contained herein, the matters
addressed in this item 7 constitute "forward-looking statements". Such
forward-looking statements are subject to a variety of risks and uncertainties
that could cause actual results to differ materially from those anticipated by
the Company's management.

Reference is made to the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of the Annual Report
which is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS
AND SUPPLEMENTARY DATA

Reference is made to the "Consolidated Financial Statements" and
"Notes to Consolidated Financial Statements" sections of the Annual Report
which is incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

None

(This space intentionally left blank)

Page 17
<PAGE> 18
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS
OF THE REGISTRANT

Reference is made to Item 4. "Executive Officers of the Registrant"
and the Company's 1996 Proxy Statement which is incorporated herein by
reference.

ITEM 11. EXECUTIVE COMPENSATION

Reference is made to the Company's 1996 Proxy Statement which is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT

Reference is made to the Company's 1996 Proxy Statement which is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND
RELATED TRANSACTIONS

Reference is made to the Company's 1996 Proxy Statement which is
incorporated herein by reference.

(This space intentionally left blank)

Page 18
<PAGE> 19
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K

The following documents are filed as a part of this report:

(a)1. Financial Statements

The following financial statements of the Registrant, together with
the Report of Independent Public Accountants, are included in the
Annual Report, which is incorporated herein by reference, and filed
herewith as part of this report:

(1) Report of Independent Public Accountants

(2) Consolidated Statements of Income for each of the three years
in the period ended December 31, 1995

(3) Consolidated Balance Sheets as of December 31, 1995 and 1994

(4) Consolidated Statements of Shareholders' Equity for each of
the three years in the period ended December 31, 1995

(5) Consolidated Statements of Cash Flows for each of the three
years in the period ended December 31, 1995

(6) Notes to Consolidated Financial Statements

2. Supplemental Financial Statement Schedules

The following report and schedule appear on pages 24 and 26 of this
report:

(1) Report of Independent Public Accountants on Supplemental
Schedule

(2) Schedule II, Valuation and Qualifying Accounts

Schedules other than those listed above have been omitted because the
required information is shown in the consolidated financial statements
or in the notes thereto, or the amounts involved are not significant
or the required matter is not applicable.

(This space intentionally left blank)

Page 19
<PAGE> 20
3. Exhibits

<TABLE>
<S> <C>
3.1 Articles of Incorporation of the Registrant (Incorporated by reference to Exhibit 3.1 to Registrant's Annual
Report on Form 10-K for the year ended December 31, 1994.)

3.2 By-Laws of the Registrant (Incorporated by reference to Exhibit 3.2 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1994.)

9.1 Voting Trust Agreement (Incorporated by reference to Exhibit 9.1 to Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1985.)

9.2 First Amendment to the Voting Trust Agreement (Incorporated by reference to Exhibit 9.1 to Registrant's Quarterly
Report on Form 10-Q for the quarter ended September 30, 1989.)

9.3 Second Amendment to the Voting Trust Agreement (Incorporated by reference to Exhibit 9.1 to Registrant's Quarterly
Report on Form 10-Q for the Quarter ended September 30, 1992.)

9.4 Third Amendment to the Voting Trust Agreement.

10.2 Lease dated March 2, 1976 between the Registrant and Louis L. Borick filed on Form 8-K dated May, 1976 (Incorporated
by reference to Exhibit 10.2 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1983.)

10.9 Incentive Stock Option Plan and Third Amendment of Non-Qualified Stock Option Plan of the Registrant (Incorporated by
reference to the Registrant's 1984 Proxy Statement.)

10.11 Lease Agreement dated December 18, 1970 and amendments dated November 30, 1974 and April 20, 1981 between Borick
Building Corporation and Registrant (Incorporated by reference to Exhibit 10.11 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1983.)

10.15 Employment Agreement dated January 1, 1992 between Louis L. Borick and the Registrant (Incorporated by reference
to Exhibit 10.15 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1991.)

10.16 Employment Agreement dated January 1, 1987 between Raymond C. Brown and the Registrant (Incorporated by reference
to Exhibit 10.16 to Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1986.)

10.17 Employment Agreement dated January 1, 1987 between R. Jeffrey Ornstein and the Registrant (Incorporated by reference
to Exhibit 10.17 to Registrant's Quarterly Report on Form 10-Q for the quarter ended December 31, 1986.)

10.19 Lease and Addenda thereto dated December 19, 1987 between Steven J. Borick, Linda S. Borick and Robert A. Borick as
tenants in common, d.b.a. Keswick Properties, and the Registrant (Incorporated by reference to Exhibit 10.19 to
Registrant's Annual Report on Form 10-K for the year ended December 31, 1987.)
</TABLE>

Page 20
<PAGE> 21

<TABLE>
<S> <C>
10.20 Supplemental Executive Retirement Plan of the Registrant (Incorporated by reference to Exhibit 10.20 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1987.)

10.24 1988 Stock Option Plan of the Registrant (Incorporated by Reference to Exhibit 10.24 to Registrant's Annual Report
on Form 10-K for the year ended December 31, 1988.)

10.26 $25 million Note Agreement dated as of September 15, 1989 between Aetna Life Insurance Company, Teachers Insurance
Annuity Association of America and the Registrant (Incorporated by Reference to Exhibit 10.25 to Registrant's
Quarterly Report on Form 10-Q for the quarter ended September 30, 1989.)

10.27 Stock Option Agreement dated February 24, 1989 between the Registrant and Louis L. Borick (Incorporated by reference
to Exhibit 28.2 to Registrant's Form S-8 dated November, 1989.)

10.30 Amendment dated January 1, 1991 to Employment agreements between the Registrant and each of Raymond C. Brown and
R. Jeffrey Ornstein (Incorporated by Reference to Exhibit 10.29 to Registrant's Quarterly Report on Form 10-Q for
the quarter ended June 30, 1990.)

10.32 Employment Agreement dated January 1, 1994 between Louis L. Borick and the Registrant (Incorporated by reference to
Exhibit 10.32 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1993.)

10.33 1993 Stock Option Plan of the Registrant (Incorporated by reference to Exhibit 28.1 to Registrant's Form S-8 filed
June 10, 1993.)

10.34 Amendment to the 1988 Stock Option Plan of the Registrant (Incorporated by reference to Exhibit 10.34 to Registrant's
Annual Report on Form 10-K for the year ended December 31, 1991.)

10.35 1991 Non-Employee Director Stock Option Plan (Incorporated by reference to Exhibit 28.1 to Registrant's Form S-8
dated June, 1992.)

10.36 Stock Option Agreement dated March 9, 1993 between Louis L. Borick and the Registrant (Incorporated by Reference
to Exhibit 28.2 to Registrant's Form S-8 filed June 10, 1993.)

10.38 Stock Option Agreement dated January 4, 1993 between Robert F. Sloane and the Registrant (Incorporated by Reference to
Exhibit 28.3 to Registrant's Form S-8 filed June 10, 1993.)

10.39 Chief Executive Officer Annual Incentive Program dated May 9, 1994 between Louis L. Borick and the Registrant
(Incorporated by reference to Exhibit 10.39 to Registrant's Annual Report on Form 10-K for the year ended
December 31, 1994.)
</TABLE>

Page 21
<PAGE> 22

<TABLE>
<S> <C>
10.40 Letter dated February 15, 1995 between Iftikhar H. Kazmi and the Registrant (Incorporated by reference to
Exhibit 10.40 to Registrant's Annual Report on Form 10-K for the year ended December 31, 1994.)

10.41 Amendment dated December 15, 1995 to Employment agreements between Registrant and Raymond C. Brown and R. Jeffrey
Ornstein.

11.1 Computation of earnings per share (see Note 7 of "Notes to Consolidated Financial Statements" in the Annual Report
to Shareholders which is incorporated herein by reference.)

13.1 1995 Annual Report to Shareholders

21.1 List of Subsidiaries of the Company

23.1 Consent of Arthur Andersen LLP, Independent Public Accountants for the Registrant

27.1 1995 Financial Data Schedule
</TABLE>

1996 Proxy Statement

(b) Reports of Form 8-K

No reports on Form 8-K have been filed during the fourth quarter of
1995.

(This space intentionally left blank)

Page 22
<PAGE> 23

(This page intentionally left blank)

Page 23
<PAGE> 24

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SUPPLEMENTAL SCHEDULE

To Superior Industries International, Inc.:

We have audited in accordance with generally accepted auditing standards, the
consolidated financial statements included in Superior Industries
International, Inc.'s annual report to shareholders incorporated by reference
in this Form 10-K, and have issued our report thereon dated February 13, 1996.
Our audits were made for the purpose of forming an opinion on those statements
taken as a whole. The schedule listed in the index above is presented for
purposes of complying with the Securities and Exchange Commission's rules and
is not part of the basic financial statements. This schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, fairly state in all material respects
the financial data required to be set forth therein in relation to the basic
financial statements taken as a whole.

ARTHUR ANDERSEN LLP

Los Angeles, California
February 13, 1996

Page 24

<PAGE> 25
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

March 22, 1996

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

By /s/ Louis L. Borick
-----------------------------------------
LOUIS L. BORICK
President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.

/s/ Louis L. Borick President, March 22, 1996
- ----------------------- Chairman of the Board
Louis L. Borick and Director
(Principal Executive Officer)

/s/ R. Jeffrey Ornstein Vice President & CFO March 22, 1996
- ----------------------- and Director
R. Jeffrey Ornstein (Principal Financial Officer)

/s/ Raymond C. Brown Senior Vice President March 22, 1996
- ----------------------- and Director
Raymond C. Brown

/s/ Sheldon I. Ausman Director March 22, 1996
- -----------------------
Sheldon I. Ausman

/s/ Steven J. Borick Director March 22, 1996
- -----------------------
Steven J. Borick

/s/ Philip W. Colburn Director March 22, 1996
- -----------------------
Philip W. Colburn

/s/ V. Bond Evans Director March 22, 1996
- -----------------------
V. Bond Evans

/s/ Jack H. Parkinson Director March 22, 1996
- -----------------------
Jack H. Parkinson
</TABLE>
Page 25

<PAGE> 26
SIGNATURES

March 22, 1996

SUPERIOR INDUSTRIES INTERNATIONAL, INC.

By
-------------------------------------
LOUIS L. BORICK
President and Chief Executive Officer

President, March 22, 1996
- --------------------------- Chairman of the Board
Louis L. Borick and Director
(Principal Executive Officer)

Vice President & CFO March 22, 1996
- --------------------------- and Director
R. Jeffrey Ornstein (Principal Financial Officer)

Senior Vice President March 22, 1996
- --------------------------- and Director
Raymond C. Brown

Director March 22, 1996
- ---------------------------
Sheldon I. Ausman

Director March 22, 1996
- ---------------------------
Steven J. Borick

Director March 22, 1996
- ---------------------------
Philip W. Colburn

Director March 22, 1996
- ---------------------------
V. Bond Evans

Director March 22, 1996
- ---------------------------
Jack H. Parkinson
</TABLE>
Page 25

<PAGE> 27
SUPERIOR INDUSTRIES INTERNATIONAL, INC. AND SUBSIDIARIES
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993

ALLOWANCE FOR DOUBTFUL ACCOUNTS

<TABLE>
<S> <C>
BALANCE AT DECEMBER 31, 1992 $ 832,000

ADD (DEDUCT):
PROVISION -
RECOVERIES 13,000
ACCOUNTS WRITTEN OFF (276,000)
---------

BALANCE AT DECEMBER 31, 1993 569,000

ADD (DEDUCT):
PROVISION -
RECOVERIES 1,000
ACCOUNTS WRITTEN OFF (29,000)
---------

BALANCE AT DECEMBER 31, 1994 541,000
---------

ADD (DEDUCT):
PROVISION 244,000
RECOVERIES 20,000
ACCOUNTS WRITTEN OFF (83,000)
---------

BALANCE AT DECEMBER 31, 1995 $ 722,000
=========
</TABLE>

<PAGE> 1
EXHIBIT 9.4

THIRD AMENDMENT TO
VOTING TRUST AGREEMENT

THIS THIRD AMENDMENT TO VOTING TRUST AGREEMENT (the "Third Amendment")
is entered into as of the 1st day of August 1995, by and between Juanita A.
Borick and Louis L. Borick, individually and as Trustee (as such term is
defined in that certain Voting Trust Agreement (the "Agreement") entered into
as of January 1, 1985, as amended by the First Amendment dated as of
October 13, 1989 (the "First Amendment") and the Second Amendment dated as of
October 15, 1992 (the "Second Amendment") and is made with reference to the
following facts:

A. The Agreement provides for the establishment of a Voting Trust with
respect to certain shares of common stock of Superior Industries International,
Inc., a California corporation (formerly a Delaware corporation), owned by
Juanita A. Borick and Louis L. Borick and the depositing of those shares with
Mr. Borick, as Trustee under the Agreement.

B. The Agreement had an initial term of five years, through
December 31, 1989. The First Amendment extended the term of the Agreement
through December 31, 1992, and the Second Amendment extended the term through
December 31, 1995.

C. Juanita A. Borick and Louis L. Borick now desire to further extend
the term of the Agreement for an additional two years through December 31,
1997.

<PAGE> 2
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Juanita A. Borick and Louis L. Borick, individually and as
Trustee, hereby agree as follows:

1. The term of the Agreement is hereby extended for an additional two
years, through and until 11:59 P.M. on December 31, 1997, during which time the
Agreement shall continue in full force and effect unless terminated prior
thereto in accordance with its terms.

2. Except as expressly amended hereby, all of the other provisions of
the Agreement shall remain in full force and effect as written.

This Third Amendment is signed and delivered as of the 1st day of
August, 1995 in Los Angeles, California.

/s/ JUANITA A. BORICK
-----------------------------------
(Juanita A. Borick)

/s/ LOUIS L. BORICK
-----------------------------------
(Louis L. Borick, individually
and as Trustee)

SUPERIOR INDUSTRIES
INTERNATIONAL, INC.

By /s/ R. JEFFREY ORNSTEIN
--------------------------------
(R. Jeffrey Ornstein
Vice President)

<PAGE> 3
SUPERIOR (Logo) SUPERIOR INDUSTRIES INTERNATIONAL, INC.
7800 Woodley Avenue - Van Nuys, CA 91406-1788
(818) 781-4973 - Telex: 65-1454 - Fax: (818) 780-5631

December 15, 1995

Mr. Raymond C. Brown
4952 Vanalden Avenue
Tarzana, California 91356

Re: EMPLOYMENT AGREEMENT

Dear Ray:

As you know, you currently serve as Senior Vice President of Superior
Industries International, Inc. (the "Company") pursuant to that certain
Employment Agreement entered into as of January 1, 1987 (the "Agreement") and
amended on December 12, 1988, on December 17, 1990 and on December 18, 1993
which, by its terms, will expire on December 31, 1995. Since your continued
employment with the Company is extremely valuable and desirable to the Company,
and since it is in the best interests of the Company and its stockholders to
maintain and secure your continued employment by the Company, and, in
consideration for the extension of the term of the Agreement and the other
benefits accorded to you thereunder, you are willing to continue your
employment with the Company, the Company and you hereby agree as follows:

1. EXTENSION OF TERM

Section 6(a)(1) of the Agreement is hereby amended so that the Term
of the Agreement be extended until December 31, 1997. Accordingly, all
references in the Agreement to December 31, 1995 as to the termination date of
the Agreement or the date for terminating any benefits, rights, privileges,
obligations or undertakings by or for either you or the Company pursuant to the
Agreement, as hereby amended by substituting December 31, 1997, therefore and
all dates or periods of time in the Agreement are hereby changed or extended, as
the cause may be, to a period of time subsequent to December 31, 1995.

2. OTHER TERMS AND PROVISIONS

Except as specifically changed by this letter, all other provisions
of the Agreement are and shall remain in full force and effect. Unless
otherwise or further defined in this letter, all terms defined in the Agreement
and used herein shall have the same meanings herein as specified in the
Agreement.

<PAGE> 4
Mr. Raymond C. Brown
December 15, 1995
Page 2

3. EFFECTIVE DATE

The effective date of this letter and the terms contained herein
shall be the date hereof.

Please acknowledge your approval and agreement to the above terms by
countersigning the enclosed copy of this letter where indicated, and returning
the signed copy to the Company.

"Company": SUPERIOR INDUSTRIES INTERNATIONAL, INC.

By: /s/ LOUIS L. BORICK
------------------------------------
Louis L. Borick, President

THE ABOVE TERMS ARE
HEREBY APPROVED AND
December 15, 1995

/s/ RAYMOND C. BROWN
- --------------------------
Raymond C. Brown

<PAGE> 1
EXHIBIT 10.41

SUPERIOR (Logo) SUPERIOR INDUSTRIES INTERNATIONAL, INC.
7800 Woodley Avenue - Van Nuys, CA 91406-1788
(818) 781-4973 - Telex: 65-1454 - Fax: (818) 780-5631

December 15, 1995

Mr. R. Jeffrey Ornstein
144 Waterview Street
Playa del Rey, CA 90293

Re: EMPLOYMENT AGREEMENT

Dear Jeff:

As you know, you currently serve as Vice President & CFO of Superior
Industries International, Inc. (the "Company") pursuant to that certain
Employment Agreement entered into as of January 1, 1987 (the "Agreement") and
amended on December 12, 1988, on December 17, 1990 and on December 18, 1993
which, by its terms, will expire on December 31, 1995. Since your continued
employment with the Company is extremely valuable and desirable to the Company,
and since it is in the best interests of the Company and its stockholders to
maintain and secure your continued employment by the Company, and, in
consideration for the extension of the term of the Agreement and the other
benefits accorded to you thereunder, you are willing to continue your
employment with the Company, the Company and you hereby agree as follows:

1. EXTENSION OF TERM

2. OTHER TERMS AND PROVISIONS

<PAGE> 2
Mr. R. Jeffrey Ornstein
December 15, 1995
Page 2

3. EFFECTIVE DATE

The effective date of this letter and the terms contained herein
shall be the date hereof.

Please acknowledge your approval and agreement to the above terms by
countersigning the enclosed copy of this letter where indicated, and returning
the signed copy to the Company.

"Company": SUPERIOR INDUSTRIES INTERNATIONAL, INC.

By: /s/ LOUIS L. BORICK
------------------------------------
Louis L. Borick, President

THE ABOVE TERMS ARE
HEREBY APPROVED AND
December 15, 1995

/s/ R. JEFFREY ORNSTEIN
- --------------------------
R. Jeffrey Ornstein

<PAGE> 1
EXHIBIT 13.1

FRONT COVER

[PHOTO]

1995
Annual
Report

Superior
Industries
International, Inc.

BACK COVER

[PHOTO]

7800 Woodley Avenue
Van Nuys, CA 91406
818.781.4973
Fax 818.780.3500

Superior
Industries
International, Inc.
SUP
Listed
NYSE
THE NEW YORK STOCK EXCHANGE

Front & Back Covers

Global Expansion

Established in 1957, Superior Industries International, Inc. is the world's
largest manufacturer of cast aluminum wheels and a leading manufacturer of
automotive accessory products for the aftermarket. Superior manufactures wheels
for approximately 40 percent of all cars produced with aluminum wheels in North
America, enjoying long term relationships with Ford and General Motors as their
largest and highest-rated supplier. On the international front, Superior has
expanded its business with Japanese original equipment manufacturers (OEMs), is
growing its business in Latin America through its newly completed plant in
Mexico, and has established a significant presence in the European market with
its most recent joint venture and future plant in Hungary. The Company will
continue to look at other parts of the globe for geographic expansion and joint
venture opportunities. By forming and strengthening its alliances with other
international industry leaders today, Superior is setting the groundwork for
tomorrow's globalization.

Quarterly Common Stock Price Information

<TABLE>
<CAPTION>
1995 1994 1993
High Low High Low High Low
<S> <C> <C> <C> <C> <C> <C>
First Quarter $29 $23 7/8 $46 1/4 $31 3/8 $29 1/8 $18 5/8
Second Quarter 32 1/8 24 3/4 37 30 38 28 1/8
Third Quarter 35 3/4 25 3/4 34 28 39 1/4 37
Fourth Quarter 29 24 1/2 30 1/4 24 1/4 49 3/8 34 5/8
</TABLE>

The common stock of Superior Industries International, Inc. is traded on the New
York Stock Exchange (symbol: SUP). The Company had approximately 1,500
stockholders of record and 28.9 million shares outstanding as of January 31,
1996.
<PAGE> 2
Corporate Information

DIRECTORS
Louis L. Borick
President and
Chairman of the Board
Raymond C. Brown
Senior Vice President
R. Jeffrey Ornstein
Vice President & CFO
Sheldon I. Ausman
Senior V.P.,
Johnson & Higgins
Retired Managing Partner, Arthur Andersen LLP
Steven J. Borick
President, Texakota, Inc.
Philip W. Colburn
Chairman, Allen Group, Inc.
V. Bond Evans
Retired President and CEO, Alumax Inc.
Jack H. Parkinson
Retired Executive V.P.,
Sunroad Enterprises

CORPORATE
OFFICERS
Louis L. Borick
President and
Chairman of the Board
Raymond C. Brown
Senior Vice President
Joseph T. D'Amico
Vice President, Materiel
Michael D. Dryden
Vice President,
International Business
Development
Ronald F. Escue
Vice President, General
Manager - Aftermarket
Wheel Division
James M. Ferguson
Vice President, OEM
Marketing Group
Morris Herstein
Vice President, Services
John Knott
Vice President, Midwest Group
Daniel L. Levine
Corporate Secretary and Assistant Treasurer
Henry C. Maldini
Vice President, Engineering
R. Jeffrey Ornstein
Vice President & CFO
Michael J. O'Rourke
Vice President, OEM Program Administrator
Delbert J. Schmitz
Vice President, Aftermarket Marketing

COUNSEL AND
AUDITORS
General Counsel
Irell & Manella
Auditors
Arthur Andersen LLP

PLANT AND
SUBSIDIARY
LOCATIONS
Superior Van Nuys
Bernard J. O'Neil
Plant Manager
Fayetteville, Arkansas
Peter J. Corio,
Plant Manager
Rogers, Arkansas
David C. Rodgers,
Plant Manager
Chrome Plating Plant
Fayetteville, Arkansas
Anthony P. Trama,
Plant Manager
Pittsburg, Kansas
P.S. Reddy,
General Manager
Johnson City, Tennessee
Leon E. Easton,
Plant Manager
Superior Puerto Rico
Pedro Mora,
General Manager
Superior Industries
de Mexico, SA de CV
Gabriel Soto,
General Manager
Superior West Memphis
Terrence J. Schultz,
General Manager
Superior Engineered
Technologies, Inc.
Joint Ventures
Aluminum Company
of America (Alcoa)
Astechnology, Inc.
Superior-Otto Fuchs (Europe)
Topy-Superior Limited (Japan)

TRANSFER AGENT
AND REGISTRAR
Chemical Mellon
Shareholder Services
Los Angeles, California
800.356.2017

ANNUAL
MEETING
The annual meeting of Superior Industries International, Inc. will be held at
10:00 a.m. on May 17, 1996 at the:
Regent Beverly Wilshire Hotel, 9500 Wilshire Blvd.,
Beverly Hills, California.

SHAREHOLDER
INFORMATION
Form 10K Annual Report to the Securities and Exchange Commission will be sent
free of charge to shareholders upon written request to R. Jeffrey Ornstein, Vice
President & CFO.

CORPORATE
OFFICES
7800 Woodley Avenue
Van Nuys, California 91406
818.781.4973
Fax 818.780.3500
SHAREHOLDER
RELATIONS
818.771.5906

Superior
Industries
International, Inc.
<PAGE> 3
Financial Highlights

<TABLE>
<CAPTION>
(In thousands except share data) Years Ended December 31,
1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C>
Income Statement
Net Sales $521,997 $456,638 $393,033 $325,314 $273,490
Gross Profit 113,797 111,368 91,464 61,942 45,306
Net Income 53,064 56,315 45,177 28,596 18,220
Balance Sheet
Current Assets $142,659 $160,771 $141,219 $134,158 $146,603
Current Liabilities 81,746 106,923 75,991 63,296 91,870
Working Capital 60,913 53,848 65,228 70,862 54,733
Total Assets 341,770 357,683 310,123 267,198 271,001
Long-Term Debt, net 5,814 23,075 34,004 44,073 53,320
Shareholders' Equity 229,153 200,182 176,869 136,747 103,992
Financial Ratios
Current Ratio 1.7:1 1.5:1 1.9:1 2.1:1 1.6:1
Long-Term Debt/Total Capitalization 2.5% 10.3% 16.1% 24.4% 33.9%
Return on Average Shareholders' Equity 24.7% 29.9% 28.8% 23.8% 19.2%
Share Data
Earnings $ 1.78 $ 1.85 $ 1.47 $ .94 $ .63
Shareholders' Equity at Year-End 7.89 6.76 5.88 4.56 3.59
Dividends .195 .165 .11 .10 .09

Net Sales
(in millions)
$ 273.5 $ 325.3 $ 393.0 $ 456.6 $ 522.0
91 92 93 94 95
Net Income
(in millions)
$ 18.2 $ 28.6 $ 45.2 $ 56.3 $ 53.1
91 92 93 94 95
Shareholders
Equity
(in millions)
$ 104.0 $ 136.7 $ 176.9 $ 200.2 $ 229.2
91 92 93 94 95
</TABLE>
<PAGE> 4
To Our Shareholders

[PHOTO]
Louis L. Borick,
President and Chairman of the Board

At Superior, we have always taken on challenges with tenacity and optimism. Back
in 1970, we met the challenge of improving our standards to procure our first
original equipment manufacturer (OEM) order from Ford and enter into this
growing market. Today, we are the world's leading manufacturer of OEM cast
aluminum wheels. Superior is now facing a period of new challenges. We are
steadfast to our long-term growth and potential by prudently expanding into new
geographic markets and seeking new joint-ventures. Superior does not stand
still. Continually improving our technology, reducing costs, and developing new
markets is embedded in our corporate culture. And just as we were back in 1970,
we are now equally optimistic these new challenges will prove as profitable as
our OEM cast aluminum wheel business.

Global Expansion

The theme of globalization was selected for our 1995 annual report since it
represents the Company's long-term strategy to ensure continued revenue growth
and shareholder value. Last year marked a significant achievement and continued
progress in the global market for Superior. We solidified our joint-venture with
German-based Otto Fuchs Metallwerke and started construction on our new aluminum
wheel manufacturing facility in Hungary. Since announcing our plans for the
European plant, we have sold 33 percent of the plant's initial capacity with the
joint-venture's first long-term contract from a major European automaker for
700,000 light forged wheels a year. The joint-venture is expected to strengthen
our ties with European OEMs, provide substantial annual revenues, and bring a
new technology to Superior.

We continue to expand our state-of-the-art facility in Mexico, increasing its
capacity. As we create more export opportunities for U.S. automakers, our plant
in Mexico will be the focus of expansion in years to come. Further-more, our
business with Japanese automakers has expanded despite a downturn in Japan's
economy and automotive industry. We continue to be optimistic about Japan as a
source for future growth potential.

Financial Results

In 1995, the Company reached a significant milestone in its financial results.
For the first time in Superior's history, the Company reached a record of over
$500 million in net sales, a total of $522 million, up over 14 percent from
1994. 1995 was also the second best year in profit gains with $53 million in net
income and $1.78 in earnings per share.

Despite difficulties with our chrome-plating facility in Fayetteville, we
reported our second best quarter earnings last year. Consistent order levels and
improvements in our OEM cast aluminum manufacturing process more than offset the
impact of the start-up of our chrome-plating operations.

Producing new products and entering new markets rarely takes place without some
pitfalls, but we are continually improving our technology and seeking new market
opportunities. We made progress on improving our chrome-plating technology last
year which could yield growth in earnings in 1996. The development of our ALCOA
truck wheel program is well on its way and we plan to begin production on two
new wheels for medium sized trucks this year. Shortly after year end, we signed
a definitive joint-venture agreement with ALCOA to produce such wheels. Through
the ALCOA joint-venture, we are entering an arena of new business with
substantial annual revenue growth.

Sales in our aftermarket division decreased reflecting the soft market
conditions in this area of the auto-motive industry. We have focused on adding
several new aftermarket custom road wheels and continue to evaluate new and
existing accessory product lines.

Outlook

While our outlook for 1996 is subject to change according to overall market
conditions, we anticipate a solid year of continuing sales and earnings momentum
comparable to 1994's performance. The Company will continue to benefit by the
increasing penetration of aluminum wheels, particularly in the light-truck
segment, which is currently the highest growth segment of the vehicle market.
And through our new Technical Sales Center in Detroit, we will better service
and continue to strengthen our existing relationships with our customers.

We enter 1996 with outstanding financial strength. Since we internally funded
our capital expansion programs over the past three years to build a stronger
company with increased production capability, we are now poised to generate
significant cash from our operations. Chrome-plating has been a slow, costly
progression of steps to correct start-up problems. Waste treatment was a major
problem which we have totally re-designed, re-engineered and installed new
equipment. We believe that we are very close to resolving the major items of
concern in that plant. Our manufacturing processes are world class and we
continue to be the lowest cost producer of aluminum wheels. The strength of our
financial position will enable the Company to thrive during a growth period and
sustain an economic downturn. Regardless of the economic environment, our
balance sheets and resources are managed in such a way that allows us to
succeed.

Last year, the Company increased the regular quarterly cash dividend 11 percent
to a rate of $.05 per share, representing the twelfth consecutive year of cash
dividend increases for Superior stockholders.

We reinstated our stock repurchase program for up to 1 million shares of common
stock. Superior's repurchase of 850,000 shares of stock to date - a large
investment valued at approximately $23 million - reflects our confidence in the
strength and future of the Company.

Globalization has made the world our field of opportunity to cultivate and grow.
We look to the future with great anticipation for solid growth and thank you for
your continued interest and support of our Company.
<PAGE> 5
European Plant

[PHOTO]
Construction already underway at the Tatabanya, Hungary manufacturing facility

One of the most significant highlights of 1995 attesting to Superior's long-term
global strategy is the signing of its joint-venture with German-based Otto Fuchs
Metallwerke and the groundbreaking of its new aluminum wheel manufacturing
facility in Tatabanya, Hungary. Designed for a total production capacity of 2.5
million wheels and $125 million in annual revenues, the plant will manufacturer
both lightweight forged and low pressure cast aluminum wheels for the European
automotive market. The Company plans to complete the facility's initial phase of
construction and begin wheel shipments by early 1997.

Superior's alliance with Otto Fuchs, a well-known European manufacturer with
sales of $1.2 billion, will position the Company as a major player in the
European marketplace. First of all, the alliance will be a strong force in the
European original equipment manufacturer (OEM) automotive wheel industry since
it combines Otto Fuchs' lightweight forging process with Superior's
technological expertise, lightweight low pressure casting process, and styling
flexibility. Automakers are looking forward to the engineering expertise, and
high standards of quality and cost control that Superior will bring to the
European OEM market.

Secondly, Otto Fuch's established presence in Europe coupled with the lower
costs and high skill labor force in Hungary will competitively position Superior
in Europe's service and price driven OEM market.

Since announcing its plans for the European plant, Superior created significant
interest among European OEMs and has gained a new customer base. The
joint-venture already received its first long term contract from a major
European automaker to supply 700,000 light forged wheels a year, filling over
one third of the new Hungarian plant's initial capacity prior to the first year
of operation.

[PHOTO]
Ground breaking celebration attended by from left, Gunter Scheipermeier, General
Partner and CEO, Otto Fuchs; Louis L. Borick, President; Wendel Schindele and
Tatabanya mayor Janos Bencsik
<PAGE> 6
New Detroit Office

The complexion of the OEM automotive industry is continually evolving. However,
three constants that have become even more critical today in supplying to OEMs
remain: pricing, service, and concept to customers. For that reason, the opening
of Superior's Technical Sales Center in Detroit last year is so significant. It
demonstrates the Company's full service commitment to customers.

Superior equipped its new Detroit office with the technology and staff to
provide integral engineering support, reduced lead times, and more cost
effective customer service. Through the expertise of its program managers,
Superior is now taking a larger role in the customer's development process,
interfacing with other system-related component suppliers and managing programs
from concept to completion.

The new Technical Sales Center will not only increase Superior's presence in
Detroit but it will enable the Company to maintain its integral relationship as
a "full service" wheel supplier, a relationship that is expected to help grow
our business.

Engineering & Manufacturing

Superior's ability to maintain its reputation as the world's leading
manufacturer of OEM aluminum wheels is based on the Company's technological
leadership, depth of expertise and foresight. Demonstrating the Company's
foresight was the decision to establish a corporate-wide systems approach that
would serve as a building block for Superior's long-term strategy to expand
globally. The project, whereby all plants would be linked and share the same
common data base for purchasing, inventory control, and delivery, was initially
tested at the Company's Johnson City plant.

Last year, the Company focused on implementing this technology throughout all
its plants, reorganizing document control into one centralized system and
building the basis for a computerized project management system for engineering.
This corporate-wide systems approach is critical to Superior's preparation for
the QS9000, an independent audit for companies with international operations who
must meet specific requirements involving documentation, traceability, and
processes and quality control.

In addition to expanding and reorganizing its engineering resources with the
opening of the new Technical Sales Center in Detroit, Superior continues to
research new casting technologies that will improve the performance and cost of
aluminum wheels. Currently, the Company is looking at bringing together the
lightweight forging technology of its European joint-venture partner, Otto
Fuchs, and Superior's styling flexibility to produce a lighter wheel design.

1995 also highlighted the start-up of production at Superior's new OEM aluminum
wheel chrome-plating facility, and the completion of the second phase of
expansion at its Fayetteville plant, now the largest OEM cast aluminum wheel
facility in the world.

The groundbreaking of Superior's new plant in Hungary, where both lightweight
forged and low pressure cast aluminum wheels will be manufactured for the
European automotive market, marked a significant milestone for the Company.
Along with the Company's state-of-the art manufacturing facility in Chihuahua,
Mexico, the new plant in Hungary reinforces Superior as an internationally
recognized corporation.

[PHOTO]
Production in Superior's fully automated chrome-plating plant
<PAGE> 7
Original Equipment Manufacturing

[PHOTO]
Superior is the exclusive supplier of light alloy wheels for the popular Nissan
Primera sold in Japan

Superior has continued its leading position as the largest aluminum wheel
manufacturer in the world and anticipates exciting prospects ahead as it moves
into new products and expands its customer base and geographic reach.

Though Superior is positioned to benefit from greater aluminum wheel
penetration, the Company has strategically lessened its dependence on North
American installation of aluminum wheels through its chrome-plating technology,
operations in Mexico, joint-ventures with Aluminum Company of America (ALCOA)
and Topy Industries, and most recently, the new venture in Hungary with Otto
Fuchs.

[PHOTO]
BMW Z-3 Roadster with Superior's stylized wheels

Expanding Global Reach

"Superior's decision to partner with Otto Fuchs made good sense," said James M.
Ferguson, Vice President, OEM Marketing Group. "Otto Fuchs' process was
competitive and lighter weight, but didn't have the styling flexibility of
Superior's cast aluminum wheels. Together, we will be offering our customers the
best product mix because we will provide the styling, affordability and mass
that people are looking for."

The new plant in Hungary will present excellent opportunities for Superior and
reinforce its presence in Europe. The joint-venture's first contract from a
European OEM for 700,000 forged wheels will fill over one third of the initial
capacity of the new plant. Furthermore, Superior is currently looking at several
contract possibilities with European OEMs for cast aluminum wheels to be
manufactured in Hungary.

Over the past three years, Superior has enjoyed strong relationships with
several European OEMs including Bayerische Motoren Werke (BMW). Superior
increased its BMW business last year with five new contracts and is now
supplying wheels for the two-seat roadster, the new Z3, and the 3 and 5 series
models. Wheels for the 3 and 5 series models will be manufactured at the
Company's Chihuahua plant for export to Germany, demonstrating Superior's
quality and cost competitiveness.

[PHOTO]
Newly designed Ford Explorer with Superior wheels
<PAGE> 8
Developing Growth in Mexico and Japan

Operations in Mexico through the Company's facility in Chihuahua have been very
successful, indicating additional growth opportunities for Superior. Superior
has been creating more export opportunities out of its Mexico plant to offset
the impact of the devaluation and provide its U.S. customers with additional
foreign export credits. As U.S. automakers continue to invest more money in
their Mexico operations and export more cars, Superior anticipates as much as 80
percent of the wheels produced in its Mexico plant will be used for export.
However, the Company has the capacity to supply the local market in Mexico when
the Mexican economy recovers.

Despite a downturn in Japan's economy and automotive industry, Superior has
maintained its market share and looks to Japan as a good source for future
growth. First of all, Superior's established relationship with Japanese OEMs
positions the Company for increased business once the economy rebounds. Through
the Company's joint-venture partnership with Topy Industries and by continually
meeting and exceeding the high standards of Japanese OEMs, Superior has gained
the confidence of Japanese manufacturers who have historically been reluctant to
do business with U.S. suppliers. Secondly, Superior is ideally positioned to
take advantage of the opportunities presented by last year's automotive trade
agreement between Japan and the U.S. While the impact of the new trade agreement
is not readily visible, the agreement is likely to increase the sale of U.S.
automobiles and automotive parts to Japan.

Japan is also expected to be an excellent market for Superior's new line of cast
aluminum wheels for medium sized commercial trucks and buses to be manufactured
under the ALCOA name this year.

[PHOTO]
Pontiac Firebird with Superior chrome-plated aluminum wheels

Developing New Business Opportunities

Another growing business opportunity for Superior is its OEM chrome-plated
aluminum wheels. Superior experienced some delays in gearing up operations at
its chrome-plating facility in Fayetteville last year. However, the Company has
been improving the chrome-plating process which could yield substantial
financial results this year when it achieves operational goals and consistent
week-to-week improvements. Phase I production is expected to run at full
capacity to keep up with the pace of demand for chrome-plated aluminum wheels.

Strengthening Domestic Customer Base

Superior continues to strengthen its relationship as a key supplier to Ford and
General Motors. The Company has maintained its status as Ford's only "full
service" wheel supplier. In 1995, General Motors solidified its relationship
with Superior by signing a "lifetime" contract for the production of cast
aluminum wheels. Estimated to exceed $1 billion in GM business over the next
five years, the contract pertains to the "lifetime" of all current models
extending from 1996 to 2000.

Securing Future Opportunities

Superior's future in the OEM market is one of growth opportunities with new
technology and processes, new products, new customers, and new plant locations.

Suppliers willing to make global investments today and support their customers'
worldwide operations will secure increased business by OEM manufacturers in the
future. Superior has already taken major strides to ensure its global
competitive stance by making the financial commitment to meet customers' needs
for technological enhancements, reduced costs, and globalization.

Aftermarket

Superior currently supplies 62 product lines and 3,000 parts for the automotive
aftermarket ranging from steering wheels and covers, suspension products, seat
belts and license plate holders to chrome-plated steel and aluminum road wheels.
The Company's diverse aftermarket products are sold through some of the most
prominent wholesalers and retail outlets in the U.S. and Canada including ITCO
Tire Company, Les Schwab, Pep Boys, Auto-Zone, Northern Automotive, Belle Tire,
Wal-Mart, Western Auto, Canadian Tire, and Paccar. Superior's aftermar-ket
business accounted for 6.9 percent of overall revenue in 1995, a total of
approximately $36 million. While this area of Superior's business was affected
last year by softening aftermarket industry conditions, the Company has focused
on developing products and expanding existing product lines with the most
profitability and future sales potential.

For example, Superior expanded its exhaust extension line with new styles and
finishes last year. The Company also introduced a new super wide cover for
thicker steering wheels called the Super Sport Grip, and developed a new line of
stretch on velour steering wheel covers. In addition, the recent introduction of
several new after-market wheels developed last year has already resulted in
orders in excess of $1 million with two additional styles to be introduced this
year.

In 1996, Superior will continue to focus on developing profitable product
lines such as interior accessories for the light truck and sport utility market.
In addition, many of Superior's distributors are continuing to expand
geographically, which should prove beneficial to the Company's after-market
business in years to come.

[PHOTO]
Assortment of aftermarket accessory products

Alcoa Joint-Venture

In 1993, Superior entered into a joint development project with ALCOA, the
world's largest manufacturer of forged aluminum wheels for large trucks and
buses, to develop a new line of cast aluminum wheels for medium sized commercial
trucks and buses in the Class 3 through 8 range.

The Company made substantial progress last year by completing the development of
the 19 1/2" cast aluminum wheel for Class 4 through 6 trucks. Superior plans to
begin manufacturing wheels under the ALCOA name in 1996.

Although the marketing process involves more time to develop, the Company
believes the ALCOA truck program will build momentum and open an arena of new
business. This is another statement of confidence for the future growth of our
Company.

[PHOTO]
Example of successfully developed 19 1/2" cast aluminum truck wheel for class 4
through 6 trucks
<PAGE> 9
Management's Discussion and Analysis of Financial Condition

RESULTS OF OPERATIONS

1995 Compared to 1994

Net sales in 1995 increased 14.3 percent to a record $522.0 million compared to
$456.6 million in 1994. Higher net sales reflects higher pricing due to
increased material costs to original equipment manufacturer (OEM) customers. The
Company's OEM business increased $68.5 million, or 16.4 percent over 1994, with
unit shipments of cast aluminum road wheels increasing 1.4 percent from 1994,
while North American automotive production decreased 1.6 percent. Aluminum wheel
installation rates on automobiles and light trucks rose to a record 43.9 percent
for the 1995 model year from 41.0 percent for the 1994 model year and 39.5
percent for the 1993 model year. Management believes the trend of higher cast
aluminum wheel installation rates will continue.

Aftermarket product net sales decreased $3.1 million, or 8.1 percent over 1994
as a sluggish economy impacted the entire aftermarket industry.

Gross profit was 21.8 percent of net sales in 1995 compared to 24.4 percent in
1994. Reduced gross profit margins reflect a number of factors. First, lower
than expected OEM wheel shipment and production levels were accentuated by
additional wheel making capacity added as a result of plant expansion activities
in Fayetteville, Arkansas and Chihuahua, Mexico. Secondly, the price of raw
material increased throughout the year. The aluminum content of selling prices
to OEMs is adjusted to current market conditions which, when the Company, from
time to time, enters into fixed purchase contracts, subjects the Company to the
risks of market changes. The cost of aluminum is a significant component in the
overall cost of a wheel. As the price of aluminum increases the effect is to
reduce overall gross margin percentages although gross profit in absolute
dollars remains unchanged. Finally, while the Company has ongoing programs to
reduce costs to its customers and in the past, has generally been successful in
substantially mitigating pricing pressure from its customers, it is becoming
increasingly more difficult to do so without impacting margins. The Company will
continue to aggressively implement cost savings strategies to meet customer
pricing expectations and maintain margins; however, the impact of future
customer pricing pressures and increasing industry-wide competition to the
Company's financial position and results of operations is not known. Selling,
general and administrative expenses, measured as a percentage of net sales,
decreased to 3.8 percent in 1995 compared to 4.2 percent in 1994, and increased
in absolute dollars. The increase in absolute dollars is a result of higher OEM
commissions, which are paid as a percentage of sales dollars, and two
aftermarket product liability lawsuit settlements.

Interest expense increased $426,000 compared to 1994. The largest component of
the change was a reduction of capitalized interest in 1995 reflecting reduced
OEM plant construction activities. However, the overall interest cost in 1995
was lower than 1994 due to current and prior year payments and prepayments on
Senior notes, including the retirement of the 10.22% Senior notes, offset
substantially by increased use of short-term borrowings required to manage
working capital requirements.

Interest income decreased $734,000 over 1994 as cash and short-term investments
were utilized to fund capital expenditures, repurchases of the Company's common
stock and on-going working capital requirements.

Miscellaneous, net was $6.7 million and increased $5.9 million from 1994. Higher
expenses primarily reflect $5.8 million of pre-production costs associated with
the Fayetteville chrome-plating facility start-up, compared to $1.8 million of
pre-production charges for the Chihuahua, Mexico and Fayetteville chrome-plating
facilities in 1994, and investment and foreign exchange losses. The consolidated
tax rate in 1995 decreased slightly to 37.5 percent of pre-tax income versus
37.6 percent in 1994. See Note 6 of the consolidated financial statements.
<PAGE> 10
1994 Compared to 1993

Net sales in 1994 increased 16.2 percent to $456.6 million compared to $393
million in 1993. The increase was primarily attributable to growth in the
Company's original equipment manufacturer (OEM) cast aluminum wheel business.
Buoyed by a strong North American automotive market, the Company's OEM business
increased $60.4 million, or 16.9 percent over 1993. Unit shipments of cast
aluminum road wheels increased 15.5 percent from 1993, while average selling
prices, which rose throughout the year, were slightly higher than 1993.

Aftermarket product net sales, without the impact of "Do-Ray," a Canadian mirror
and light business sold in August, 1993, increased $7.4 million, or 23.5 percent
over 1993, and reflected increases in the "Streetwear" product line, including
new styles of aluminum and chrome-plated aluminum wheels. Year-to-date net sales
in the aftermarket business increased $3.2 million, or 8.9 percent over 1993.

Gross profit was 24.4 percent of net sales in 1994 compared to 23.3 percent in
1993. Improved gross profit margins reflected higher customer order levels that
translated into greater production requirements and more efficient and high
plant utilization resulting in incrementally higher margins. Additionally, the
Company's aggressive and ongoing cost containment programs continued to
effectively reduce costs. The Company was able to achieve significant margin
gains in spite of the January 17, 1994 Northridge earthquake, which resulted in
a $1.1 million charge to earnings, and plant expansion activities at the new
Chihuahua, Mexico OEM facility and at the Fayetteville, Arkansas OEM facility.

Selling, general and administrative expenses, measured as a percentage of net
sales, decreased to 4.2 percent in 1994 compared to 4.3 percent in 1993, and
increased in absolute dollars. The increase in absolute dollars is a result of
the additional resources required to manage the Company's expanding business
while the decrease as a percentage of net sales reflects management's successful
containment of this required expansion.

Interest expense decreased $1.4 million compared to 1993, reflecting current and
prior year payments and prepayments of Senior notes. Accentuating this decrease
was $1.9 million of interest that was capitalized as a result of the OEM plant
expansion activities. Offsetting these decreases were higher interest costs
relating to greater short-term borrowings required to manage working capital
requirements.

Interest income decreased $1.5 million over 1993 as cash and short-term
investments were utilized to fund record capital expenditures of $60.2 million,
repurchases of the Company's common stock and on-going working capital
requirements.

Miscellaneous, net was $839,000 and decreased $186,000 from 1993. Included in
this category are $1.8 million of pre-production costs relating to the start-up
of the Chihuahua, Mexico cast aluminum wheel and Fayetteville, Arkansas
chrome-plating facilities.

The consolidated tax rate in 1994 decreased slightly to 37.6 percent of pre-tax
income versus 37.8 percent in 1993. See note 6 of the consolidated financial
statements.
<PAGE> 11
Financial Condition, Liquidity and Capital Resources

Cash provided by operating activities was $83.7 million in 1995 compared to $50
million in 1994, reflecting strong earnings and high levels of non-cash charges
such as depreciation and amortization that were offset somewhat by the build-up
of inventories and the reduction of receivables. Higher inventory levels
primarily reflect the higher cost of raw materials.

Strong cash flows from operating activities were supplemented through the
partial liquidation of the Company's investment portfolio which, in turn, was
utilized for a number of activities. The Company paid down outstanding short and
long-term borrowings by a combined $42.8 million. Such payments included the
retirement of the 10.22% Senior notes three years prior to scheduled maturity,
and paying the maximum advance principal payments currently available in
addition to the required principal payments on its 9.31% Senior notes. After
paying the required principal payments on its 9.31% Senior notes in 1996, the
Company will have effectively retired all of its long-term debt. The Company
also funded OEM plant expansion and enhancements, including both the
chrome-plating and cast aluminum wheel expansions in Fayetteville, Arkansas, and
the second phase of the Chihuahua, Mexico wheel facility. Cash resources were
also utilized for the retirement of 737,000 shares of the Company's common
stock. Finally, the Company contributed $9.7 million to its Hungarian
joint-venture with German-based Otto Fuchs Metallwerke ("Otto Fuchs"). See
discussion below.

During 1995, the Company formalized its 50/50 joint-venture agreement with
Otto-Fuchs to construct a plant in Tatabanya, Hungary for the production of both
lightweight forged and low pressure cast aluminum wheels for the European
automotive market. Ground breaking for this facility took place in the fourth
quarter of 1995 and initial shipments are slated for the first quarter of 1997.
The cost of this facility, currently estimated at $70 million, will be funded
through mimimum equal capital contributions of approximately $20 million by each
partner and long-term project financing.

Since 1990, funding for plant expansion, in excess of $325 million, has come
from internally generated cash flow and working capital.

The value of the Mexican peso experienced a precipitous decline in value
relative to the U.S. dollar and the local Mexican economy entered into a severe
recession. This decline in value of the Mexican peso, which began in December
1994 with the Mexican government removing currency controls, continued
throughout 1995. The impact of these declines in value relative to the Company's
wholly owned subsidiary, Superior Industries de Mexico, SA de CV, has resulted
in a cumulative unrealized translation loss of $13.8 million, net of taxes and
has been charged directly to shareholders' equity. The Mexican production
facility represents less than 10 percent of the Company's total capacity.

The softening of the North American automotive market during 1995, accentuated
by the harsh winter weather conditions that continued into 1996, has reduced the
Company's production requirements thereby creating excess manufacturing
capacity. While management believes that 1996 will be a solid year for the
Company and is optimistic about its long-term opportunities for growth, current
economic conditions may continue and negatively impact customer order levels for
aluminum road wheels. In addition, the start-up of the chrome-plating facility
in Fayetteville, Arkansas may significantly impact the results of operations in
1996.

The Company's financial condition remains strong. In 1995, working capital and
current ratio increased to $60.9 million and 1.7:1, versus $53.8 million and
1.5:1 in 1994, respectively,as the Company completed its domestic plant
expansion program. The long-term debt to total capitalization ratio improved to
2.5 percent in 1995 from 10.3 percent in 1994. The Company believes it is well
positioned to take full advantage of new and complementary business
opportunities, expanding international markets and, at the same time, able to
withstand downturns in the economy. During 1995, the Board of Directors
announced an 11 percent increase in the cash dividend, representing the twelfth
consecutive year of dividend payments and increases. Management anticipates
continuing its policy of paying dividends; however, this is contingent upon
various factors, including economic and market conditions, all of which cannot
be accurately predicted.

During 1995 the Financial Accounting Standards Board issued Statements of
Financial Accounting Standards ("SFAS") No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to be Disposed of" and SFAS No.
123, "Accounting for Stock-Based Compensation" (See note 4 of the Consolidated
Financial Statements), both of which become effective for fiscal years beginning
after December 15, 1995. Had the Company elected early adoption of SFAS No. 121,
management believes there would not be a material impact to the results of
operations or financial position of the Company.

Inflation

Inflation did not have a material impact on the results of operations or the
financial condition of the Company. The Company believes its purchasing and the
majority of its customer contracts are structured to minimize the impact of
changes caused by inflation.
<PAGE> 12
Consolidated Statements of Income

<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Net Sales $ 521,997,000 $ 456,638,000 $ 393,033,000
Cost of Sales 408,200,000 345,270,000 301,569,000
Gross Profit 113,797,000 111,368,000 91,464,000
Selling, general and administrative expenses 19,965,000 19,203,000 16,887,000
Income From Operations 93,832,000 92,165,000 74,577,000
Interest expense 3,288,000 2,862,000 4,298,000
Interest income 1,106,000 1,840,000 3,386,000
Miscellaneous expense, net 6,732,000 839,000 1,025,000
(8,914,000) (1,861,000) (1,937,000)
Income Before Income Taxes 84,918,000 90,304,000 72,640,000
Income Taxes 31,854,000 33,989,000 27,463,000
Net Income $ 53,064,000 $ 56,315,000 $ 45,177,000
Earnings Per Share $ 1.78 $ 1.85 $ 1.47
</TABLE>

See notes to consolidated financial statements.

Consolidated Balance Sheets

<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and equivalents $ 3,366,000 $ 5,884,000
Marketable securities, net 7,813,000 21,158,000
Receivables, net
Trade 56,092,000 63,704,000
Other 14,797,000 17,619,000
70,889,000 81,323,000
Inventories 53,823,000 44,746,000
Deferred income taxes 5,382,000 5,899,000
Other current assets 1,386,000 1,761,000
Total current assets 142,659,000 160,771,000
PROPERTY, PLANT AND EQUIPMENT, net 177,538,000 185,853,000
OTHER LONG-TERM ASSETS 21,573,000 11,059,000
$341,770,000 $357,683,000
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable and current portion of long-term debt $ 13,628,000 $ 39,201,000
Accounts payable 46,920,000 46,135,000
Accrued liabilities 21,198,000 21,587,000
Total current liabilities 81,746,000 106,923,000
LONG-TERM DEBT, net 5,814,000 23,075,000
OTHER LONG-TERM LIABILITIES 17,207,000 16,897,000
DEFERRED INCOME TAXES 7,850,000 10,606,000
SHAREHOLDERS' EQUITY 229,153,000 200,182,000
$341,770,000 $357,683,000
</TABLE>

See notes to consolidated financial statements.
<PAGE> 13
Consolidated Statements of Shareholders' Equity

<TABLE>
<CAPTION>
Unrealized
Common Stock Additional Cumulative Loss On
Number of Paid-In Translation Marketable Retained
Shares Amount Capital Adjustment Securities Earnings Total
<S> <C> <C> <C> <C> <C> <C> <C>
Balances at
December 31, 1992 19,998,460 $ 9,999,000 $ 71,908,000 $ 101,000 $ -- $ 54,739,000 $136,747,000
Net income -- -- -- -- -- 45,177,000 45,177,000
Stock options exercised,
including related
tax benefit 114,818 58,000 2,080,000 -- -- -- 2,138,000
Stock split 10,031,136 5,016,000 -- -- -- (5,016,000) --
Repurchases of
common stock (83,000) (42,000) (3,199,000) -- -- -- (3,241,000)
Cash dividends
($.11/share) -- -- -- -- -- (3,409,000) (3,409,000)
Foreign currency
translation -- -- -- (543,000) -- -- (543,000)
Balances at
December 31, 1993 30,061,414 15,031,000 70,789,000 (442,000) -- 91,491,000 176,869,000
Net income -- -- -- -- -- 56,315,000 56,315,000
Stock options exercised,
including related
tax benefit 94,221 47,000 1,585,000 -- -- -- 1,632,000
Repurchases of
common stock (544,000) (272,000) (16,819,000) -- -- -- (17,091,000)
Cash dividends
($.165/share) -- -- -- -- -- (4,913,000) (4,913,000)
Unrealized losses:
Foreign currency
translation -- -- -- (10,130,000) -- -- (10,130,000)
Marketable
securities -- -- -- -- (2,500,000) -- (2,500,000)
Balances at
December 31, 1994 29,611,635 14,806,000 55,555,000 (10,572,000) (2,500,000) 142,893,000 200,182,000
Net income -- -- -- -- -- 53,064,000 53,064,000
Stock options exercised,
including related
tax benefit 154,372 77,000 2,812,000 -- -- -- 2,889,000
Repurchases of
common stock (737,000) (369,000) (19,456,000) -- -- -- (19,825,000)
Cash dividends
($.195/share) -- -- -- -- -- (5,749,000) (5,749,000)
Unrealized losses:
Foreign currency
translation -- -- -- (3,256,000) -- -- (3,256,000)
Marketable
securities -- -- -- -- 1,848,000 -- 1,848,000
Balances at
December 31, 1995 29,029,007 $14,514,000 $ 38,911,000 $(13,828,000) $ (652,000) $190,208,000 $229,153,000
</TABLE>

See notes to consolidated financial statements.

Consolidated Statements of Cash Flows

<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 83,747,000 $ 49,953,000 $ 72,713,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (25,903,000) (60,231,000) (53,834,000)
Investment in unconsolidated joint-venture (9,664,000) -- --
Proceeds from sales of investments 17,732,000 29,377,000 78,369,000
Purchases of investments (2,911,000) (26,834,000) (82,519,000)
NET CASH USED IN INVESTING ACTIVITIES (20,746,000) (57,688,000) (57,984,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings (payments) (23,467,000) 28,267,000 --
Repurchases of common stock (19,825,000) (17,091,000) (3,241,000)
Payments of long-term debt (19,367,000) (2,550,000) (13,732,000)
Cash dividends (5,749,000) (4,913,000) (3,409,000)
Stock options exercised 2,889,000 1,632,000 2,138,000
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (65,519,000) 5,345,000 (18,244,000)
Net Decrease in Cash and Equivalents (2,518,000) (2,390,000) (3,515,000)
Cash and Equivalents at Beginning of Year 5,884,000 8,274,000 11,789,000
Cash and Equivalents at End of Year $ 3,366,000 $ 5,884,000 $ 8,274,000
</TABLE>

See notes to consolidated financial statements.
<PAGE> 14
Reconciliation of Net Income to Net Cash
Provided By Operating Activities

<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Net Income $ 53,064,000 $ 56,315,000 $ 45,177,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 27,716,000 26,604,000 21,695,000
Provision for retirement plans 1,169,000 1,108,000 904,000
Other non cash items (1,320,000) 1,043,000 (262,000)
Changes in assets and liabilities:
(Increase) decrease in:
Receivables, net 10,252,000 (16,044,000) (7,042,000)
Inventories (9,077,000) (18,112,000) (2,112,000)
Other items 3,786,000 3,637,000 422,000
Increase (decrease) in:
Accounts payable 785,000 (5,869,000) 15,341,000
Accrued liabilities (389,000) 155,000 2,198,000
Deferred income taxes (2,239,000) 1,116,000 (3,608,000)
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 83,747,000 $ 49,953,000 $ 72,713,000
</TABLE>

See notes to consolidated financial statements.
<PAGE> 15
Notes to Consolidated Financial Statements

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES THE COMPANY

The principal business of Superior Industries International, Inc. and its
subsidiaries (the Company), is the design and manufacture of cast aluminum road
wheels primarily for the domestic original equipment manufacturer (OEM) market.
It is also a leading manufacturer of custom road wheel and accessory products
for the automotive aftermarket.

The Company maintains both domestic and foreign manufacturing facilities,
including operations in Mexico and a manufacturing facility currently under
construction through a 50 percent owned joint-venture in Hungary. As of December
31, 1995, the carrying amount of these foreign facilities is $29,500,000.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of the
Company, after elimination of all significant intercompany accounts and
transactions. Investments in joint-ventures in which the Company has common
stock ownership of 50 percent are accounted for on the equity method.

These consolidated financial statements have been prepared in accordance with
generally accepted accounting principals which require the use of estimates and
assumptions by management.

FISCAL YEAR END

For presentation purposes, the Company denotes December 31 as the fiscal year
end. However, the Company's fiscal year ends on the last Sunday of the calendar
year.

FINANCIAL INSTRUMENTS

Financial instruments consist primarily of cash and equivalents, marketable
securities, short-term borrowings and Senior notes. The Company generally places
these financial instruments with high quality institutions operating in various
industries, including government agencies, over a broad geographic area.

Cash equivalents consist primarily of certificates of deposit, carried at cost,
which approximates market value. Certificates of deposit were $2,880,000 and
$5,630,000 at December 31, 1995 and 1994, respectively.

Marketable securities, which generally consist of U.S. government agency
securities, corporate bonds, money market preferred stock and equities, are all
considered "available-for-sale" and are carried at the lower of cost or market
on a portfolio basis. The stated maturities of market-able debt securities are
generally over ten years. Market value at December 31, 1995, which was
determined using quoted prices from national exchanges, resulted in a $652,000
unrealized loss recorded directly to shareholders' equity. The net realized loss
from sales of available-for-sale securities utilizing the specific
identification method was $709,000 and $99,000 for the years ended December 31,
1995 and 1994, respectively. At December 31, 1995 and 1994, marketable
securities of $5,792,000 and $4,960,000, respectively, were pledged as
collateral against outstanding letters of credit.

RESEARCH AND DEVELOPMENT COSTS

Research and development costs of $3,265,000, $5,413,000 and $3,332,000 have
been charged against operations during 1995, 1994 and 1993, respectively.
<PAGE> 16
FOREIGN CURRENCY TRANSLATION

Foreign currency asset and liability accounts are translated at exchange rates
in effect at the end of the accounting period. Revenue and expense accounts are
translated at a weighted average of exchange rates during the period. The
cumulative effect of translation as well as gains and losses on intercompany
foreign currency transactions are recorded as a separate component of
shareholders' equity. Foreign exchange gains/(losses) of ($287,000), $164,000,
and ($70,000) have been recorded as part of operations during 1995, 1994 and
1993, respectively.

In December 1994, the Mexican government devalued and then removed currency
controls on the New Peso (the "Peso") which caused a decline in the value of the
Peso relative to the U.S. dollar that continued throughout 1995. The impact of
this decline in value has resulted in a cumulative unrealized translation loss
of $13.8 million, net of related tax effects, and has been charged directly to
shareholders' equity.

STATEMENTS OF CASH FLOWS

For purposes of the Consolidated Statements of Cash Flows, the Company considers
all certificates of deposit and highly liquid investments with an original
maturity of three months or less to be cash equivalents. Purchases and proceeds
from investment transactions were all transacted in the Company's
available-for-sale portfolio of debt and equity securities.

Interest paid, net of amounts capitalized (see note 10), and income taxes paid
were $3,540,000 and $25,448,000 for 1995; $2,494,000 and $32,610,000 for 1994;
$4,543,000 and $27,779,000 for 1993, respectively.

RECLASSIFICATIONS

Certain prior year items have been reclassified to conform with current year
presentations.

2. BORROWING ARRANGEMENTS

The Company maintains a $25,000,000 credit facility on a committed, unsecured
basis expiring in May 1997. This facility provides for an interest rate of 40 or
50 basis points above either the Interbank Offered Rate or the Federal Funds
rate, respectively. The Company also maintains combined line and letter of
credit facilities under which it may borrow up to $30,000,000 on an uncommitted,
unsecured basis at rates generally below prime. There were $4,800,000 and
$28,267,000 in short-term borrowings outstanding at December 31, 1995 and 1994,
respectively. The weighted average interest rates during 1995, 1994 and 1993
were 6.7 percent, 4.8 percent, and 3.9 percent, respectively.

The long-term debt of the Company is summarized as follows:

<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
9.31% Senior notes due 1997, with annual principal
payments of $8,333,000 beginning in 1995 $11,666,000 $25,000,000
Capitalized lease obligations and other debt, substantially
all of which is secured by fixed assets, with various maturities
and interest rates ranging between 7.3 percent and 11.3 percent 2,976,000 3,438,000
10.22% Senior notes due 1998, with annual principal payments
of $2,143,000 was paid in full during 1995 -- 5,571,000
14,642,000 34,009,000
Less - Current portion 8,828,000 10,934,000
$ 5,814,000 $23,075,000
</TABLE>

The Senior notes and certain credit facility agreements contain, among other
covenants, restrictions with respect to borrowings, dividends, investments,
purchases and sales of assets outside the ordinary course of business, and
certain guarantees. Also required is the maintenance of a minimum tangible net
worth, as defined, of $180,000,000 and certain financial ratios.

Included with capitalized lease obligations and other debt is a capital lease of
$1,260,000, funded through the proceeds of an industrial development revenue
bond, payable in varying annual principal payments through 1999 with remaining
interest rates ranging between 7.4 percent and 7.6 percent. The Company has
guaranteed the repayment of the underlying bonds.

Future maturities of long-term debt are approximately $8,828,000 for 1996,
$3,878,000 for 1997, $592,000 for 1998, $645,000 for 1999, $330,000 for 2000 and
$369,000 thereafter.

3. LEASES

The Company leases its corporate office and certain manufacturing facilities
from Louis L. Borick, President, and Juanita A. Borick. The lease expires in the
year 2001 and has a current annual payment of $1,140,000 (including rent of
$748,000 related to land and escalations which are accounted for as operating
leases), exclusive of future escalation payments which are determined every five
years.

Included in property, plant and equipment at both December 31, 1995 and 1994,
are buildings and
<PAGE> 17
equipment held under capital leases of $5,590,000 with accumulated amortization
of $2,949,000 and $2,738,000, respectively.

The Company leases certain land, facilities and equipment under long-term
operating leases expiring at various dates through 2063. The terms of certain of
these leases require scheduled rent increases at specified intervals which are
not dependent on the occurrence of any future events. Additionally, the Company
reduced the amortization period of these same operating leases to appropriately
match the estimated useful life of the underlying machinery. Total lease expense
for all operating leases amounted to $5,040,000 in 1995, $4,183,000 in 1994 and
$3,904,000 in 1993.

Future minimum payments under all leases are summarized as follows:

<TABLE>
<CAPTION>
Leases
Years Ending December 31, Operating Capital
<S> <C> <C>
1996 $ 5,165,000 $ 767,000
1997 4,628,000 771,000
1998 4,311,000 768,000
1999 7,684,000 768,000
2000 2,216,000 392,000
Thereafter 371,000 392,000
24,375,000 3,858,000
Amounts representing interest -- 895,000
$24,375,000 $2,963,000
</TABLE>

Future minimum payments of $3,803,000 for operating leases, including known rent
escalations, and $2,352,000, including interest, for capital leases are payable
to Louis L. Borick, President, and Juanita A. Borick. The amounts paid to Louis
L. Borick, Juanita A. Borick or a related entity owned by Louis L. Borick's
children during 1995, 1994 and 1993, for all leases were $1,583,000, $1,571,000
and $1,542,000, respectively.

4. STOCK OPTIONS

At December 31, 1995 and 1994, the Company had reserved 2,243,965 and 2,398,337
shares of its common stock, respectively, for issuance to directors, officers
and key employees under Stock Option Plans. Options are generally subject to
grant at not less than fair market value on the date of grant and expire no
later than ten years after the date of the grant. At December 31, 1995 and 1994,
exercisable options to purchase shares of the Company's common stock totaled
844,726 and 616,540, respectively.
<PAGE> 18
A summary of changes in outstanding options follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
Under Option Under Option Under Option
Option Price Option Price Option Price
<S> <C> <C> <C> <C> <C> <C>
Options outstanding
at beginning of year 1,432,223 $ 1.80-$39.88 1,413,944 $ 1.80-$39.88 444,446 $ 2.70-$22.63
Options granted 137,000 24.50- 34.00 119,000 26.25- 31.00 602,500 19.08- 39.88
Stock split -- -- -- -- 485,948 1.80- 29.67
Options exercised (154,372) 3.75- 31.00 (94,221) 5.19- 19.08 (114,818) 3.75- 15.09
Options canceled
or expired (113,375) 19.08- 31.00 (6,500) 15.09- 31.00 (4,132) 5.19- 15.09
Options outstanding
at end of year 1,301,476 $ 1.80-$39.88 1,432,223 $ 1.80-$39.88 1,413,944 $ 1.80-$39.88
</TABLE>

No significant amounts are reflected in the Company's income accounts with
respect to these stock options. Proceeds from the sales of stock under option
are credited to common stock at par value, with amounts in excess of par value
credited to additional paid-in capital.

In October 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 123, "Accounting for Stock-Based
Compensation". Statement 123 introduces a fair-value based method of accounting
for stock-based compensation and encourages, but does not require, companies to
recognize compensation expense for grants of stock, stock options and other
equity instruments to employees based on this new fair value method. Currently,
compensation expense for a stock option is measured on the first date at which
both the number of shares and the exercise price are known. Under the Company's
stock option plans, this would typically be the date of grant. To the extent the
exercise price equals or exceeds the market value of the stock on the grant
date, no expense is recognized.

The Company will adopt the disclosure requirements of Statement 123 during the
year ended December 31, 1996, but, as permitted, does not intend to adopt its
accounting rules for the recognition of compensation expense.

5. RETIREMENT PLANS

The Company has an unfunded supplemental executive retirement plan covering its
directors, officers and other key members of management. The Company has
purchased key man life insurance policies on each of the participants to provide
for future liabilities. The plan provides for a defined benefit to become
payable on the employee's death or upon retirement which is based on final
average compensation, subject to certain vesting requirements.

The components of cost for this retirement plan are as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Service cost $315,000 $335,000 $226,000
Interest cost 425,000 360,000 312,000
Net amortization 54,000 55,000 55,000
Other unrecognized loss 17,000 -- --
Net cost $811,000 $750,000 $593,000
</TABLE>

A schedule reconciling the projected benefit obligation with recorded plan
liability follows:

<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Actuarial present value of benefit obligations:
Vested benefit obligation $ 3,690,000 $ 3,230,000
Accumulated benefit obligation $ 5,900,000 $ 4,962,000
Projected benefit obligation $ 6,497,000 $ 5,501,000
Unrecognized prior service cost (329,000) (383,000)
Adjustment required to recognize minimum liability 457,000 330,000
Other unrecognized experience losses (725,000) (486,000)
Recorded liability $ 5,900,000 $ 4,962,000
</TABLE>
<PAGE> 19
Actuarial assumptions for the retirement plan include seven percent for the
assumed discount rate and five percent for the assumed rate of average future
compensation increases for 1995 and 1994. During 1995, the Company recorded an
adjustment of $127,000 to recognize the minimum pension liability required by
Statement of Financial Accounting Standards No. 87. The adjustment, which had no
effect on income, was offset by recording an equal amount as an intangible
asset.

The Company has contributory employee retirement savings plans in addition to
mandatory profit sharing plans covering substantially all of its employees. The
employer contribution is determined at the discretion of the Company and totaled
$2,605,000, $2,471,000 and $2,401,000 for 1995, 1994 and 1993, respectively.

The Company also has a deferred compensation agreement with its President under
which the Company has agreed to pay certain amounts annually subsequent to
retirement. For accounting purposes, the present value of such payments is being
charged ratably to expense over the average estimated remaining years of active
employment. These charges totaled $358,000, $358,000 and $300,000 for 1995, 1994
and 1993, respectively.

6. TAXES ON INCOME

Effective January 1, 1993, the Company adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". Under Statement 109, deferred
tax assets and liabilities are determined under the "liability method" based on
differences between financial reporting and tax bases of assets and liabilities
and are measured using the enacted tax rates and laws that will be in effect
when the differences are expected to reverse. Prior to the adoption of Statement
109, income tax expense was determined under the "deferred method" based on
items of income and expense that were reported in different years in the
financial statements and tax returns and were measured at the tax rate in effect
in the year the differences originated.

As permitted by Statement 109, the Company has elected not to restate the
financial statements of any prior years. The cumulative effect of the change in
the method of accounting for income taxes for the year ended December 31, 1993
was not material.

The provision (credit) for income taxes is comprised of the following
components:

<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Federal: Current $22,338,000 $26,501,000 $24,836,000
Deferred 1,884,000 2,007,000 (1,421,000)
24,222,000 28,508,000 23,415,000

State: Current 3,891,000 5,527,000 4,160,000
Deferred 208,000 169,000 (306,000)
4,099,000 5,696,000 3,854,000

Foreign: Current 175,000 414,000 95,000
Deferred 3,358,000 (629,000) 99,000
3,533,000 (215,000) 194,000
$31,854,000 $33,989,000 $27,463,000

Total: Current $26,404,000 $32,442,000 $29,091,000
Deferred 5,450,000 1,547,000 (1,628,000)
$31,854,000 $33,989,000 $27,463,000
</TABLE>

Provision is made for United States income taxes on undistributed earnings of
international subsidiaries. Tax credits are accounted for as a reduction of the
provision for income taxes in the year in
<PAGE> 20
which the credits arise.

The reconciliation of the statutory United States federal income tax rate to the
Company's effective income tax rate is as follows:

<TABLE>
<CAPTION>
Years Ended December 31,
1995 1994 1993
<S> <C> <C> <C>
Statutory amount, computed
at 35 percent $29,721,000 $31,606,000 $25,424,000
State tax provisions,
net of federal income tax benefit 2,664,000 3,702,000 2,505,000
Foreign income taxed at rates
other than the statutory rate (107,000) (592,000) (602,000)
Federal tax credits (722,000) (486,000) --
Other, net 298,000 (241,000) 136,000
$31,854,000 $33,989,000 $27,463,000
</TABLE>

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes. Significant components of
the Company's deferred tax assets and liabilities are as follows:

<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Deferred tax assets
Insurance reserves not currently deductible $ (1,166,000) $ (1,297,000)
Inventory reserves not currently deductible (569,000) (520,000)
Other reserves not currently deductible (4,369,000) (6,509,000)
Deferred compensation (3,523,000) (2,844,000)
Revenue recognized for tax purposes (597,000) (437,000)
State taxes expensed currently, deductible in following year (1,057,000) (831,000)
Foreign currency translation adjustment (7,400,000) --
Net operating loss carryforwards -- (735,000)
Other (1,675,000) (1,818,000)
(20,356,000) (14,991,000)
Deferred tax liabilities
Differences between book and tax basis
of property, plant and equipment 19,351,000 18,068,000
Other 3,473,000 1,630,000
22,824,000 19,698,000
$ 2,468,000 $ 4,707,000
</TABLE>

7. SHAREHOLDERS' EQUITY

The common stock of the Company at December 31, 1995 consists of 100,000,000
authorized shares with a $.50 par value. The Company also has authorized
1,000,000 shares of preferred stock with a par value of $25.00, none of which
has been issued.

The computation of earnings per share is based upon the weighted average number
of common shares outstanding and common stock equivalents, when dilutive. During
1995, 1994 and 1993 the weighted average number of common shares outstanding was
29,895,000, 30,376,000 and 30,708,000, respectively.

8. BUSINESS SEGMENT

The Company manufactures motor vehicle parts and accessories for sale on normal,
<PAGE> 21
generally unsecured trade terms to original equipment manufacturers (OEMs) and
the auto-motive aftermarket on an integrated one-segment basis. At December 31,
1995 and 1994, the allowance for doubtful accounts receivable was $722,000 and
$541,000, respectively. The following percentages of the Company's consolidated
net sales were made to the Ford Motor Company and General Motors Corporation:
1995, 47.4 percent and 41.2 percent; 1994, 47.0 percent and 41.0 percent; 1993,
46.8 percent and 42.4 percent.

9. INVENTORIES

<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Raw materials $18,485,000 $18,210,000
Work in process 12,815,000 8,965,000
Finished goods 22,523,000 17,571,000
$53,823,000 $44,746,000
</TABLE>

Inventories (which include material, labor and factory overhead) are stated at
the lower of cost, using the first-in, first-out (FIFO) method, or market.

10. PROPERTY AND DEPRECIATION

<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Land and buildings $ 47,900,000 $ 43,030,000
Machinery and equipment 243,685,000 214,656,000
Leasehold improvements and other 4,540,000 4,487,000
Construction in progress 13,764,000 30,609,000
309,889,000 292,782,000
Less -
Accumulated depreciation
and amortization 132,351,000 106,929,000
$177,538,000 $185,853,000
</TABLE>

Property, plant and equipment are recorded at cost. Major replacements or
improvements are capitalized, with expenditures for minor replacements,
maintenance and repairs and tooling costs charged against current operations.
Maintenance and repairs charged against operations during 1995, 1994 and 1993
were $15,103,000, $12,113,000 and $10,877,000, respectively. Depreciation and
amortization are generally provided on the straight-line method over the
estimated useful lives which range from 3-33 years. Such depreciation and
amortization of fixed assets totaled $25,947,000, $24,571,000 and $20,595,000
during 1995, 1994 and 1993, respectively. Costs and related accumulated
depreciation of property replaced, retired or otherwise disposed of are removed
from the accounts and gains or losses, if any, are included in the results of
operations for the period. Property and equipment no longer used in operations
are stated at the lower of cost or estimated net realizable value and included
in other current assets.

Interest is capitalized on the construction of major facilities. Capitalized
interest is recorded as part of the cost of the asset to which it is related and
is depreciated over the asset's estimated useful life. Interest costs of
$850,000, $1,933,000 and $405,000 were capitalized during 1995, 1994 and 1993,
respectively.

11. FAIR VALUE OF FINANCIAL INSTRUMENTS

The fair values of the Company's financial instruments are summarized as
follows:

<PAGE> 22
<TABLE>
<CAPTION>
December 31,
1995 1994
Carrying Carrying
Amount Fair Value Amount Fair Value
<S> <C> <C> <C> <C>
Assets:
Cash and equivalents $ 3,366,000 $ 3,366,000 $ 5,884,000 $ 5,884,000
Marketable securities 7,813,000 7,813,000 21,158,000 21,158,000
Long-term investments 6,883,000 6,883,000 5,322,000 5,322,000

Liabilities:
Short-term borrowings 4,800,000 4,800,000 28,267,000 28,267,000
Senior notes 11,666,000 12,048,000 30,571,000 31,033,000
</TABLE>

Long-term investments include interests in affordable housing limited
partnerships which provide favorable income tax benefits to the Company over a
fifteen-year period. While the fair value of these long-term investments is not
practicable to obtain, the Company believes that the carrying amount represents
the best estimate of fair value. The carrying amount of short-term borrowings
approximates fair value. The fair value of the Company's Senior notes is
estimated based on the discounted value of future cash flows utilizing an
estimated discount rate currently available to the Company for similarly
structured debt.

12. LIABILITIES

The components of accrued and long-term liabilities are as follows:

<TABLE>
<CAPTION>
December 31,
1995 1994
<S> <C> <C>
Accrued
Payroll and related benefits $ 9,665,000 $10,171,000
Insurance reserves 3,969,000 4,473,000
Taxes, other than income tax 2,478,000 2,135,000
Income taxes 2,217,000 1,579,000
Interest and dividends 1,538,000 1,664,000
Tooling and maintenance 718,000 732,000
Other 613,000 833,000
$21,198,000 $21,587,000

Long-term
Executive retirement and deferred
compensation plans $ 8,290,000 $ 6,949,000
Deferred operating lease payments 7,168,000 6,262,000
Other 1,749,000 3,686,000
$17,207,000 $16,897,000
</TABLE>

13. CONTINGENCIES

The Company is party to various legal and environmental proceedings incidental
to its business. Certain claims, suits and complaints arising in the ordinary
course of business have been filed or are pending against the Company. Based on
facts now known to the Company, management believes all such matters are
adequately provided for, covered by insurance or, if not so covered or provided
for, are without merit, or involve such amounts that would not materially
adversely affect the consolidated results of operations and cash flows or
financial position of the Company.

The Company has employment agreements with certain executive officers that, in
addition to customary benefit and severance provisions, guarantee lump sum
payments after a change in control of the Company, if certain events occur.
Compensation which might be payable under these agreements has not been accrued
as no such change in control has occurred.

<PAGE> 23
14. OTHER INCOME

Other income (expense) includes pre-production costs of $5,830,000 and
$1,100,000 relating to the start-up of the Fayetteville, Arkansas chrome-plating
facility in 1995 and 1994, respectively. In 1994, other income (expense)
includes pre-production costs of $730,000 related to the start-up of the
Chihuahua, Mexico cast aluminum wheel facility.

15. QUARTERLY FINANCIAL DATA (UNAUDITED)
(In thousands except per share amounts)

<TABLE>
<CAPTION>
December 31, 1995
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
<S> <C> <C> <C> <C> <C>
Net Sales $134,360 $142,761 $113,176 $131,700 $521,977
Gross Profit 31,419 34,200 20,890 27,288 113,797
Net Income 15,725 16,699 8,285 12,355 53,064
Earnings Per Share .53 .56 .28 .42 1.78
Dividends Per Share .045 .05 .05 .05 .195

<CAPTION>
December 31, 1994
First Second Third Fourth Total
Quarter Quarter Quarter Quarter Year
<S> <C> <C> <C> <C> <C>
Net Sales $105,938 $120,706 $107,384 $122,610 $456,638
Gross Profit 24,574 30,328 26,138 30,328 111,368
Net Income 12,515 15,397 12,642 15,761 56,315
Earnings Per Share .41 .51 .42 .52 1.85
Dividends Per Share .03 .045 .045 .045 .165
</TABLE>
<PAGE> 24
Statement of Management's
Financial Responsibility

To Our Shareholders:

The management of Superior Industries International, Inc. is responsible for the
integrity and objectivity of the financial and operating information contained
in this Annual Report, including the consolidated financial statements. The
consolidated financial statements were prepared in accordance with generally
accepted accounting principles appropriate in the circumstances, and include
amounts that are based on management's best estimates and judgment.

Management of the Company has established a system of internal accounting
controls which provides reasonable assurance that assets are properly
safeguarded and accounted for and that transactions are executed in accordance
with management's authorization and recorded and reported properly.

The consolidated financial statements have been audited by our independent
public accountants, Arthur Andersen LLP whose unqualified report is presented
herein. Their opinion is based on procedures performed in accordance with
generally accepted auditing standards, including tests of the accounting
records, obtaining an understanding of internal accounting controls solely for
purposes of planning and performing their audits, and such other auditing
procedures as they considered necessary in the circumstances to provide them
reasonable assurance that the consolidated financial statements are neither
materially misleading nor contain material errors.

The Audit Committee of the Board of Directors, consisting solely of outside
Directors, meets periodically with the independent public accountants and
management to review and discuss the scope and major findings of the independent
accountants' examination. The independent accountants have free access to the
Audit Committee at any time.

Louis L. Borick
President and Chairman of the Board
R. Jeffrey Ornstein
Vice President & CFO
<PAGE> 25
Report of Independent Public Accountants
To Superior Industries International, Inc.:

We have audited the accompanying consolidated balance sheets of Superior
Industries International, Inc. (a California corporation) and subsidiaries as of
December 31, 1995 and 1994, and the related consolidated statements of income,
shareholders' equity, and cash flows for each of the three years in the period
ended December 31, 1995. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Superior Industries
International, Inc. and subsidiaries as of December 31, 1995 and 1994, and the
results of their operations and their cash flows for each of the three years in
the period ended December 31, 1995, in conformity with generally accepted
accounting principles.

Arthur Andersen LLP
Los Angeles, California
February 13, 1996

<PAGE> 1
EXHIBIT 21.1

LIST OF SUBSIDIARIES

<TABLE>
<CAPTION>
Percentage of
Voting Stock
Jurisdiction Owned by the
of Company or
Name Incorporation Other Subsidiary
---- ------------- ----------------
<S> <C> <C>
Superior - Ideal, Inc. Iowa, U.S.A. 100%
owned by Company

Superior Performance Ontario, Canada 100%
Products (Canada) Inc. owned by Company

Industrias Universales Mexico 100%
Unidas de Mexico, S.A. owned by Company

Superior Industries Delaware, U.S.A. 100%
International - owned by Company
P.R. Inc.

Suinco Assurance Ltd. Bermuda 100%
owned by Company

Superior Industries Delaware, U.S.A. 100%
International Leasing owned by Superior
Corporation Industries
International -
P.R. Inc.

Superior Astechnology Delaware, U.S.A. 100%
Inc. owned by Company

Topy-Superior Limited Tokyo, Japan 50%
owned by Company

Superior Engineered Delaware, U.S.A. 100%
Technologies, Inc. owned by Company

Superior Industries Chihuahua, Mexico 100%
de Mexico S.A. de C.V. owned by Company
and Superior Engineered
Technologies, Inc.

Suoftec Light Metal Products B.V. Netherlands 100%
owned by Company
</TABLE>

<PAGE> 2
<TABLE>
<CAPTION>
Percentage of
Voting Stock
Jurisdiction Owned by the
of Company or
Name Incorporation Other Subsidiary
---- ------------- ----------------
<S> <C> <C>
Suoftec Light Metal Products KFT Hungary 50%
owned by Suoftec Light
Metal Products B.V.

Superior Industries International - Tennessee, U.S.A. 100%
Tennessee, Inc. owned by Superior
International Distribution
Corporation

Superior Industries International - Kansas, U.S.A. 100%
Kansas, Inc. owned by Superior
International Distribution
Corporation

Superior Industries International - Arkansas, U.S.A. 100%
Arkansas, Inc. owned by Superior
International Distribution
Corporation

Superior Industries International - California, U.S.A. 100%
California, Inc. owned by Superior
International Distribution
Corporation

Superior Industries Management California, U.S.A. 100%
Corporation owned by Company

Superior Industries International California, U.S.A. 100%
Distribution Corporation owned by Company

Superior Industries International - Michigan, U.S.A. 100%
Michigan, Inc. owned by Superior
International Distribution
Corporation
</TABLE>

<PAGE> 1
EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the incorporation of
our reports dated February 13, 1996, included in Superior Industries
International, Inc.'s annual report to shareholders on Form 10-K for the year
ended December 31, 1995, into the Company's previously filed Registration
Statements File Nos. 2-80130, 33-48547 and 33-64088.

ARTHUR ANDERSEN LLP

Los Angeles, California
March 22, 1996

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1995 AND THE CONSOLIDATED
STATEMENTS OF INCOME FOR THE YEAR THEN ENDED AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,366
<SECURITIES> 7,813
<RECEIVABLES> 72,163
<ALLOWANCES> 1,274
<INVENTORY> 53,823
<CURRENT-ASSETS> 142,659
<PP&E> 309,889
<DEPRECIATION> 177,538
<TOTAL-ASSETS> 341,770
<CURRENT-LIABILITIES> 81,746
<BONDS> 2,964
<COMMON> 14,515
0
0
<OTHER-SE> 214,638
<TOTAL-LIABILITY-AND-EQUITY> 341,770
<SALES> 521,997
<TOTAL-REVENUES> 523,103
<CGS> 408,200
<TOTAL-COSTS> 428,165
<OTHER-EXPENSES> 6,732<F1>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,288
<INCOME-PRETAX> 84,918
<INCOME-TAX> 31,854
<INCOME-CONTINUING> 53,064
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 53,064
<EPS-PRIMARY> 1.78
<EPS-DILUTED> 0
<FN>
<F1>OTHER EXPENSES INCLUDE MISCELLANEOUS EXPENSE
</FN>

</TABLE>