SEMA News - December 2009
By Yvonne Wang
The Chinese Specialty-Equipment Market
Ar Dee Zhou, Dyno King’s director of marketing and technology, indicated that 90% of its specialty products are imports, and most customers come to Dyno King to find the greatest variety and selection of brands for specialty products.
Dyno King distributes products from Oettinger, Caractere, ABT, Carlsson, APR, Dimsport, Revo, Espelir, Apexi, Cusco, AP, Tein, Endless, Defi, Gab, Trust, HKS, Bilstein, Pagid, BBS, NGK, Denso, OZ, K&N, Pipercross, H&R, K&W, Koni, Neuspeed, Spax, Weds, Rays, Brembo, Wilwood, Supersprint, Enkei, Remus, Summit, Pivot, Devil, SARD, Prodrive and FGK.
SEMA News: What is the most popular category of modifications among your retail customers and enthusiasts?
Ar Dee Zhou: We have two categories of customers: beginners and experts. Beginners customize their cars with body kits, aftermarket headlights and exhaust systems. Expert-level enthusiasts focus mainly on performance upgrades. Their modifications consist of brakes, suspension, sway bars, turbos, intercoolers, increased-size wheels and spoilers. The timeframe for expert-level modifications is usually about two to three months because we do not hold large inventories. Although we have more than 20,000 products, we only carry inventory for the best-selling 10% of our product lines.
SN: How has the market changed in the last two years?
ADZ: Compared to two years ago, there has been an increase in imported brands entering the Chinese specialty market. Imported brands that initiated their marketing efforts two years ago are now celebrating success in brand awareness among Chinese consumers. Unfortunately, with the increased brand awareness among Chinese enthusiasts, there has also been an increase in the availability of counterfeited copies of foreign brands.
SN: Please describe your typical customer and how much enthusiasts spend on average?
ADZ: Typical customers at Dyno King are males between the ages of 28–36 who spend anywhere from $4,400–$7,400 on their cars. They might come in and spend $1,500 initially, but we find that they will usually come back and spend another $1,500–$2,000.
We have other customers—professional racers—who will spend between $70,000–$150,000 to modify their vehicles, specifically targeting the tracks they run.
SN: What are the most modified vehicles in your installation center?
ADZ: Most of the vehicles Dyno King modifies are turbo-equipped vehicles, such as the Audi A4, VW Bora, Subaru WRX and Mitsubishi Evolution. We also specialize in tuning for the BMW 3/5 Series, Mercedes-Benz C/E Class, Mazda3 and 6 and VW Golf and Polo.
SN: What percentage of your business consists of importing foreign parts and accessories?
ADZ: Ninety percent of our business is imports, with 60% from Japan and the rest equally divided among U.S. and European brands.
SN: Are you looking for new products? If so, what are the products your company is looking to import into China?
ADZ: We are looking for U.S. brakes, suspension and all related performance accessories with fitments for Chinese domestic-made cars. Most of the aftermarket performance parts and accessories are for import vehicles only. There is a huge market for U.S. manufacturers to import parts and accessories for Chinese-made vehicles because the current supply of parts and accessories is mostly domestically made and lacks quality and precision. The popular domestically made vehicles are the BYD F3, the Great Wall Florid [looks like a Scion xA], the Great Wall Coolbear [looks like a Scion xB] and the Chana Alsvin [looks like a Mazda3].
SN: What suggestions do you have for SEMA-member companies looking to sell into China?
ADZ: China is a land of opportunity. Do not be afraid to enter into the Chinese specialty market because of fear of counterfeits. The unique characteristic of this market is its huge population and enormous potential for consumer spending. Products holding high-quality standards cannot be easily replaced by counterfeited products.
SN: How large would you estimate the specialty-equipment market is in China? How many large distributors are there in the sport-compact market in Shenzhen?
ADZ: China has the largest population in the world and the largest vehicle sales in the world, yet it is 10 years behind in the specialty market. There is a lot of learning to do for this market. I estimate that the market is close to what the U.S. market size was about 10 years ago. In Shenzhen, there are about eight to 10 midsize to large distributors and more than 30 small-scale retail outlets.