SEMA eNews Vol. 12, No. 24, June 18, 2009

Jeep Wrangler, Toyota Land Cruiser, FJ Most Popular with Chinese Offroaders

FB Life, a large automotive website based in China, selected eight offroad distributors that FB Life founder Kevin Lv believes are among the best outlets serving Chinese offroad enthusiasts. SEMA interviewed each of these firms to learn more about each establishment’s number of employees and technicians, most customized SUVs, most customized brands and specialty products.

SEMA found that the Jeep Wrangler, Toyota Land Cruiser and FJ Cruiser were the most popular vehicles to customize by the establishments and throughout China. Comments from distributors demonstrate positive perceptions and increased demand of U.S. offroad specialty products among Chinese offroad enthusiasts.

Among the specialty products identified as the most sought after brands included Warn, Pro Comp, Rancho, ARB, TJM, Hella, IPF and BFGoodrich. The most popular specialty-equipment parts among Chinese offroad enthusiasts are suspension lift kits, front grille bars, tires and wheels and headlights.

 China Offroad Event
 The largest annual event for offroad enthusiasts in China is the desert festival. In 2008, the event drew 63 teams, more than 800 offroad vehicles, more than 2,000 individual participants and 71 media attendees.

As disposable income increases among the overall Chinese population, more Chinese enthusiasts are able to enjoy offroading. Lv noted that the most popular destinations for these excursions among his members are Mongolia, Tibet and Yunnan in the Southwestern part of China.

Chinese consumers have access to both domestically produced and imported SUVs. The top selling domestically produced SUVs in 2008 were the Honda CRV, Great Wall Hoover, Chery Tiggo, Hyundai Tucson and KIA Sportage. The total number of domestically produced SUVs sold in 2008 was 441,839 units.

Imported SUVs are calculated separately in China, and, in 2008, there was a significant increase of import SUV sales. According to calculations from the Chinese Trading Center for Automobile Import (CTCAI), import SUV sales in China are dominated by Japanese brands/makes. In 2008, 97,964 units of imported Japanese SUVs were sold; 39,253 units of imported Korean SUVs were sold; and 31,598 units of imported U.S. SUVs were sold.

The presence of U.S. SUVs has significantly increased by more than 50%, going from 15,712 units in 2007 to 31,598 units in 2008. The most current results from CTCAI show the first quarter sales of U.S. SUVs are 8,416 units, which is second to Japan at 13,327 units.

Jeep Wrangler
 
The most popular off road vehicle at outing events is the Jeep Wrangler. Mr. Kevin Lv, whose company also FB Life also sponsors driving tours, outdoor photography, scientific expeditions, and large scale racing events in the offroad market, noted that Jeep Wrangler car clubs are the most popular within his social network.
 

The most accessorized SUVs are imported SUVs. Kevin Lv mentioned that a large percentage of enthusiasts who buy Jeep Wranglers purchase the model new. This is especially true for the new Jeep Wrangler Rubicon, which has just entered the SUV market in China and has captured the heart of many offroad enthusiasts. As for Toyota Land Cruiser and Jeep Cherokee enthusiasts, there are a greater number of them purchasing used cars.

“Consumers of import SUVs like a Jeep Wrangler would almost never leave their vehicle in stock condition,” commented Lv. “The purpose of purchasing an import SUV is to customize it for outing events or professional offroad races. The increasing number of import SUVs will create an increased demand for a greater variety of offroad specialty parts and accessories.”

SEMA interviewed Yun Liang, a distributor of offroad parts and accessories, established in July, 2002. The company currently has more than 40 employees. In addition to distribution, Yun Liang also provides repair and installation, online retailing and outdoor camping.

Yun Liang founder Mr. Zhu says his best sellers are Rancho three-inch lift kits, Hella offroad lights and TJM winches. ARB front/rear guards and AEV air snorkels are also popular. The most customized offroad vehicles at Yun Liang are the Jeep Wrangler, Toyota Land Cruiser and Hummer H2.

According to Zhu, the spending capacities for his customers range through three different levels. One level of customer spends approximately $1,500 (USD) on lift-kit packages plus a few accessories. The next level of customer spends approximately $5,000 (USD) on a lift kit, front/rear guards, wheels and offroad tires and one or two sets of offroad lights. The highest level of customer spends anywhere from $25,000–$35,000 (USD) for a complete customization package, which may include suspension kits, winches, front/rear grille bars, front/rear struts, air compressor, air locks, front/rear leaf springs, complete skid plate with belly pan protectors, offroad lights, roof racks, side bars, air snorkels, bumper covers, auxiliary tanks, additional exterior restyling accessories and offroad tires and wheels.

 Toyota FJ Cruiser
 According to Kevin Lv, founder of FB Life, the second most customized SUVs in China is Toyota FJ Cruiser. Among the upgrades on this yellow Toyota FJ Cruiser are a Fox Racing five-inch lift, coil springs, front struts and shocks, air lockers, front and rear bumpers, and BFGoodrich off-road tires.

SEMA also interviewed V-Man Tuning, a distributor of Fox Racing and TRD products. Unlike most offroad distributors that carry a variety of import brands, V-man tuning specializes in just two import brands and the rest is on private labeling of its own V-Man brand. Mr. Liu, the founder of V-Man Tuning, told SEMA that most customization requests he receives are for Jeep Wrangler parts and accessories. Other popular vehicles for customization are the Toyota FJ Cruiser, Toyota Land Cruiser 80, Nissan Patrol, Mitsubishi Pajero and Suzuki Jimny.

“V-man Tuning receives great feedback on the quality of suspension kits from Fox Racing,” Liu said. “We have been working on a few Toyota FJ Cruisers with three-inch lift kits from Fox Racing to prepare for professional races. Enthusiasts are willing to pay for the quality products in this market.”

The distribution office of V-Man tuning employs four customer service representatives. They also have three fulltime mechanics. The best selling products are front grille guards, suspension kits and roof racks.

SEMA spoke to Mr. Yuan, the general manager of Bastion, another distributor selected by FBlife.com. Bastion is a distributor and retailer of K&N, Rancho, Pro Comp, IPF, Hella and T-Max products. There are a total of 20 employees at Bastion, and five of them are customer service representatives dedicated to the wholesale business.

Bastion is the only distributor from the eight distributors that doesn’t have an installation department, mainly due to the fact that the retailing side of the business is much smaller in comparison to other distributors. Bastion’s best selling products are K&N air filters, Rancho suspension shocks, Pro Comp suspension shocks and IPF lights series.
Mr. Yuan said that each order placed by retailers can range anywhere from two pieces to 40 pieces. “It is still unlikely for a retail shop to purchase in large quantities. Retailers usually stock very few inventories; some retailers would purchase from us after their customers pre-order the products.”

Another distributor on the selected list is 4WD China. At 4WD China, there are a total of 12 employees, and out of the 12 employees, two of them are technicians. Mr. Su mentioned that the most customized vehicles are the Toyota Land Cruiser and Nissan Patrol. The best selling brands are Optima, ARB, Warn and OME. The most popular products sold among the best selling brands are OME two-inch lift kits, Warn winch 9.5 XP, ARB front grille guards and Optima batteries.

Mr. Su’s impression of U.S. off road brands is very positive. He mentioned that the top three U.S. brands he recognizes in the offroad market are Fox Racing suspensions, King Offroad Racing shocks and Race Runner suspension shocks. “Most enthusiasts are willing to spend $4,000–$6,000 (USD) to customize their SUVs,” said Mr. Su. “A large portion of the total spending is spent on suspension systems.”

Another distributor on the list was Yongfa Trading, a distributor that focuses on the racing segment. Yongfa Trading has a total of 18 employees, and only three of the employees are technicians. The mission of the company is to focus on supplying offroad products particularly for the offroad racing specialty-equipment market. Yongfa Trading is divided into three departments: Tuning, distribution and racing services. Racing services is the largest market segment for Yongfa Trading.

“We are reputable in the offroad industry in China. Our company carries high-end racing products, such as Australian MCA suspension kits that cost approximately $10,000 (USD),” Mr. Chen, a manager at Yongfa Trading told SEMA. “High-end products require a deposit and two to three weeks of product delivery time.” The best selling brands at Yongfa Trading are Sparco, ATL and Toyo Tires. The most customized vehicles are the Mitsubishi Pajero, V65 and Toyota FJ Cruiser.

Energy Square, a company with a unique story behind the establishment of its current distribution network, was another distributor on the list. Energy Square initially started as a maintenance and repair center in Beijing for Jeep-branded vehicles. With many years of experience in technical repair, the company took a new challenge of adding an installation center for offroad tuning. Shortly after, Energy Square established its current distribution network for Jeep aftermarket parts and accessories only.

Jeep Cherokee in Cina
 
The Jeep Cherokee is the most customized SUVs at Energy Square and X Jeep China. Energy Square Founder, Mr. Du, says that the Jeep Cherokee’s popularity among China’s offroad enthusiasts is because it represents the offroad history of America.
 

The most customized vehicle at Energy Square is the Jeep Cherokee. According to Mr. Du of Energy Square, the most popular products sold are ARB grille guards and roof racks, Warn winches and Mopar accessories. There are a total of eight employees and two designated technicians. The facility of Energy Square provides a comfortable environment for its customers, and includes amenities such as ping-pong tables and basketball courts for its enthusiasts whether they are visiting or customizing their vehicles.

SEMA spoke to Jizhi 4x4, which was originally known as Brother Guang 4WD until in 2005 when it decided to expand its business to include installation. In 2008, Jizhi 4x4 added another division through a partnership with China Mitsubishi Ralliart and began to distribute racing parts and accessories. There are 12 employees at Jizhi 4x4, and nine of them are specialized technicians.

Mr. Wang, owner of Jizhi 4x4, explained that the most customized vehicles are the Toyota Land Cruisers, Toyota FJ Cruiser and Mitsubishi Pajero. The most popular brands sold are TJM, ARB, Warn and IPF. Among the brands most requested by Jizhi 4x4 customers are TJM pro lockers, TJM compressors, TJM front and rear bull bars and Advanti racing wheels.

“We also focus on tuning for small SUVs, such as the Honda CRV,” said Wang. “There is a significant increase in the popularity of smaller SUVs, and those customers add bull bars or roof racks.”

The final distributor interviewed was X Jeep China. According to the company’s owner Mr. Chen, X Jeep China is a large distributor and installer in Hangzhou City, China. It has a total of 12 employees and two of them are technicians. The top selling brands are IPF, Hella, Milemarker, Thule, Optima, Sure Power and Cooper Tires. The most customized SUVs are the Mitsubishi Montero and Jeep Cherokee.

Mr. Chen says what differentiates his company from other distributors is that X Jeep offers a large selection of offroad accessories rather than performance tuning upgrades. For example, Thule luggage rack is one of the best sellers at X Jeep China, followed by Hella headlights, Milemarker winches and Optima batteries.

For the detailed contact information of the selected distributors mentioned in this article, download the China Trade Leads at www.sema.org/international-resources-china.

For additional information, access the China Market Report at www.sema.org/international or contact Yvonne Wang.

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