SEMA eNews Vol. 14, No. 16, April 21, 2011

U.S.-Brand SUV Specialty Products in Demand in China

 

  china
  SEMA members will have the opportunity to meet with pre-vetted distributors and retailers from throughout China at the 2011 SEMA CIAPE China Business Development Conference in Beijing from September 7–10, 2011.

SEMA recently interviewed a number of off-road shops throughout China—in Hangzhou, Yunnan Province, Beijing, Shanghai and Shenzhen—about the type of vehicles they are currently working on, how brand-aware are their customers and typical customizations.

The results for top vehicles for customization were: Jeep (Wrangler, Grand Cherokee and Commander), followed by Toyota (LC100, FJ Cruiser, Land Cruiser). To a lesser extent, Mitsubishi also made the list with the Pajero.

As for which customizations were most popular, the responses were quite unanimous with the top upgrades being suspension, wheels/tires and bull bars. A few installers also added lights and body kits to the list of top modifications. Among products sought: additional functional products for the off-roading customer as well as general packages for off-road vehicles (both American and Japanese).

Off-road shops noted that their customers relied on them to recommend customization options. Overseas, U.S. brands in general have a very good reputation, but when choosing among U.S. brands, the customer, we are told, often relies on guidance from the shop owner. Typically, as one retailer noted, only up to 30% of buyers enter their shop requesting specific brands. Others thought that number might be as low as 10%–15%.

One retailer noted: “Only about 30% of our customers ask for specific brands. When the majority of customers come to our tuning shop, they ask us to recommend some brands and analyze the advantages and disadvantages of each brand and the cost of the modifications. They consider this information and then make a final decision on what work they would like.

As for business trends, some companies report good business while another installer noted that while the consumer is desiring more extensive modifications—and their own skill level and expertise has grown to the point that they can provide the customer with the work desired—a bottleneck has developed due to the difficulty of obtaining products in a timely fashion.

Off-road shops have identified working with their overseas suppliers and distributors to reduce the typical delivery time for orders to better serve their customers. They acknowledge that their capacity to purchase larger amounts of products—thus resulting in better prices from the manufacturer and more products on hand—is a work in progress and will improve dramatically only as sales increase and they have access to sufficient capital. Others noted that the import taxes were raising the cost of doing business, yet quite a few of the companies were generally optimistic.

One retailer noted: “Now more and more Chinese can afford to purchase specialty products. We can handle any problems that arise. For the time being, we do not have any problems that we could not overcome.”

All the companies interviewed expressed an eagerness to meet with SEMA members at the next SEMA China International Auto Parts Expo (CIAPE) China Business Development Conference in Beijing in September. With one respondent noting, “I want to take a look at all of the new products from overseas and new technology in the tuning field. I have been in business for many years and pride myself on providing my customers with the best products.”

Meet with these and other buyers who have already registered to participate in the 2011 SEMA CIAPE China Business Development Conference—a low-cost one-on-one program bringing together United States manufacturers with Chinese retailers and distributors. More information is available at sema.org/china or by contacting Linda Spencer at lindas@sema.org.