Overseas Markets: Take the Long View

Chris Kersting, SEMA President and CEO We think most SEMA members would agree that we’ve arrived at an interesting time for the automotive industry. Supply has outpaced demand for oil; the dollar is one of the stronger currencies internationally; and automotive manufacturing is in a growth mode.

That’s very different from 2009, when new-car sales were down, the dollar was weak and oil prices were $100 a barrel and climbing. SEMA members had to adapt, be innovative and efficient, and had to look for alternate sources of revenue. It also sparked some of our members to recognize significant opportunities in expanding to overseas markets.

Dynamic Off-Road Market in China

Media Giant FB Life Provides Insight

The specialty-equipment market in China is booming, with perhaps no sector growing more rapidly than the off-road market. SEMA News recently talked about the off-road scene with Baokun LV, co-founder of FBLife.com and executive general manager of FB Life, a Chinese media giant and a platform for off-road enthusiasts and service suppliers.

The Mustang is Going Global

This chart, courtesy of Ford Motor Co., identifies the countries that will receive the new Mustang. Good News for Worldwide Enthusiasts and U.S. Specialty-Equipment Manufacturers

SEMA manufacturers know that the Ford Mustang is one of the most customized vehicles in the marketplace. This year marks the pony car’s 50th anniversary, and now it comes with a larger-than-ever attraction to those who wish to develop and market products for the highly accessorized musclecar,“ noted SEMA Vice President of OEM and Product Development Programs Mike Spagnola.

Positive Developments In China’s Specialty-Equipment Market

Demand Is Strong; Will Laws Be Updated Soon?

Seventeen SEMA-member companies presented their products in a two-city visit to China during the September 2014 SEMA China Business Development tour. The SEMA delegation had the opportunity to exhibit both in Beijing and Shanghai. The group was briefed by the U.S. Embassy and participated in networking events in both cities, where members had the chance to meet with buyers from throughout the country. Buyers attended the SEMA events from 23 provinces located throughout China.

SEMA Show Events to Increase Export Opportunities

Nearly 25% of buyers attending the SEMA Show reside outside the United States. Show attendees are invited to participate in three interactive sessions regarding emerging international markets where top specialty-equipment distributors and retailers will discuss business challenges and opportunities and identify the best-selling products for street-performance, off-roading and other growing niches.

A Tax Benefit for Your Exports

In the past, the creation of an Interest-Charge Domestic International Sales Corporation (IC-DISC) has allowed U.S. manufacturers from a number of industries to greatly reduce the amount of tax paid on their exports—and the automotive industry has been no exception. For example, tax specialist alliantgroup recently helped one company that produces LED lights for a variety of motor vehicles receive $235,600 in tax savings on their exports. Another company that creates fabrics and composites for automotive applications was eligible to receive $539,000 in tax dollars for its IC-DISC.

Central America

The Toyota HiLux is a popular vehicle to customize in Central America. SEMA purchased a HiLux, which is popular elsewhere in the world but is not sold in the United States, so that SEMA-member manufacturers could measure the vehicle to create export-ready product. The international vehicle measuring session program is made possible through a partnership with the U.S. Department of Commerce. An Increasingly Popular Regional Destination for U.S. Automotive Specialty-Equipment Products

With an estimated population of 42 million, Central America is an increasingly important regional market for U.S. goods. The Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) eliminates trade barriers among the seven signatories, which include the United States, Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. Before this regional trade pact, tariffs on U.S. autos and parts to the region had averaged from about 4% to 9% and even up to 30% on certain products. Most of these import taxes disappeared immediately with CAFTA-DR approval, and the rest will be eliminated by 2015.


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