If it's metric it's likely 4mm wire -- 1/8 inch is 3.2mm, so a 1/8" collar should fit 3mm wire just fine. 4mm wire is 0.157", which is just a hair over 5/32". It should measure 5/32" with a ruler, and I would expect a 5/32" collar to fit, if you could find one. Certainly a 1/8" collar drilled out with an 11/64" drill bit would fit; drill it out with a 5/32" bit and you could probably jam it on there, or just brush the inside with a rat-tail file and get it on.
I don't recommend putting the wire on a lathe -- there's really no good place to set the wire to go after it with sandpaper, and you'll leave grit on the ways.
When I'm feeling confident, I epoxy washers onto my landing gear wires -- it makes a much more compact installation than a wheel collar, and it's more secure. When the time comes to take things apart, you can generally get them off by crunching the glue with a pair of pliers.