SEMA News - December 2010

21 SEMA-Member Manufacturers Explore New Market Opportunities in China

By Linda Spencer

  SEMA News-December 2010-International-China 
   
Distributors and retailers from throughout China gathered in Beijing to meet with 21 SEMA-member companies that were participating in the first SEMA China Business Development Conference. The hotel-based program held in Beijing in September was built around a series of one-on-one meetings with pre-selected Chinese buyers who traveled to the event from cities throughout China, including Beijing, Shanghai, Ha’erbin in the far north, Guangzhou in the south and Hubei in the center of the country.  In addition to the pre-scheduled meetings, the program included a number of networking events and a day at the fourth annual edition of the China International Auto Parts Expo (CIAPE) automotive aftermarket trade show sponsored by the Ministry of Commerce, which was taking place at a nearby venue. The delegation was invited to the kick-off event, including a dinner at the Great Hall of the People, which serves as China’s parliament building and is located on the western side of Tiananmen Square.

“Connecting buyers with manufacturers is one of the fundamental roles that the association plays in domestic and global markets,” said SEMA Vice President of Communications and Events Peter MacGillivray, commenting on the purpose of the trip and the role of the association in fostering international business for its members. “We’ve known for a long time that a market for our industry is developing in China. It was exciting to see our members take an important step in developing the industry in this growing marketplace.”

     

SEMA Members That
Participated in the First SEMA China Business
Development Conference

     
  • AEM Performance Electronics
  • Amsoil Inc.
  • BDS Suspension
  • Bilstein
  • Bushwacker Inc.
  • Comp Performance Group
  • Delta Tech Industries LLC
  • eBay Motors, eBay Inc.
  • Eibach Springs Inc.
  • Girard Systems
  • Holley Performance Products Inc. (USA)
  • Injen Technology
  • K&N Engineering Inc./AEM Intake Systems
  • Nitto Tire U.S.A. Inc.
  • Performance Motorsports Inc.
  • Powersheen
  • Prestolite Performance
  • Rennen International/Donz Wheelz
  • SCT Performance
  • StopTech
  • Wheel Pros LLC  
       

SEMA President and CEO Chris Kersting added: “Ninety-five percent of the world’s consumers live outside of the United States. The recent SEMA CIAPE China Business Development Conference provided a low-cost venue for our members to explore selling to some of these buyers located in the world’s most populous country. With 21 SEMA-member companies participating in the program’s first year and the majority of participants expecting to realize some sales in China within the next 12 or so months, I believe the program was a success.”

Kersting noted that the market is not without hurdles but that the long-term outlook is positive if these issues are addressed. “The Chinese market for accessories and performance products is new, and key issues and concerns that hamper or could hamper its growth need to be addressed,” he said. “Concerns over intellectual property rights, distribution logistical problems and the need for greater progress in legalizing specialty-equipment products are among the hurdles most often identified. But given the possibilities in this market, I believe it is imperative that SEMA members explore the market firsthand during these early days in its development so as to be in a competitive position to reap the benefits as the sector grows.”

SEMA Chairman Rick Rollins noted the optimism of the group. “Everyone I talked with after the meetings had good, positive feelings,” he said. “The one-on-one meeting concept really worked. Our member manufacturers got to meet face-to-face with Chinese businesses wanting to buy their products for selling and installing in the Chinese markets. The Chinese buyers’ businesses got a much better glimpse of what we are looking for in the distribution and marketing of our products in China.”

Rollins expects that next year’s event will be even larger. Indeed, if the initial survey of participants is any indication, the future looks bright. Nearly all of the companies noted that they developed strong leads at the event. In fact, 100% of the companies participating in the survey noted that they were likely or very likely to do business in China within the next 12 months. Nearly all of the companies plan to be back at the event next year, and enthusiasm was high to run a similar program in other key world markets.

For more information on SEMA’s China program or the association’s international resources, e-mail SEMA Director of International Relations Linda Spencer.

 

The SEMA delegation participated in the opening ceremonies of the China International Auto Parts Expo (CIAPE). The 21 SEMA-member companies went on opening day of the fourth annual show, a trade-only event.     SEMA News-December 2010-International-Selling to China 
     

SEMA Chairman Rick Rollins, who is president of Rollins Performance Marketing, checked out the project vehicles at CIAPE. 

  SEMA News-December 2010-International-Selling to China 
     

SEMA President and CEO Chris Kersting (left) chatted with Famous Rhodes, director of eBay Motors, eBay Inc.—one of 21 SEMA companies that participated in the first SEMA CIAPE China Business Development Conference. 

  SEMA News-December 2010-International-Selling to China
     

Jeremy Barras (second from right), representing AEM Electronic products—a California-based manufacturer of performance electronics, gauges, controllers and other performance products—as well as StopTech—a manufacturer of high-performance brake systems for the racing and street-performance markets—talked with several buyers who sought him out during the networking breakfast.  

   SEMA News-December 2010-International-Selling to China
     
Florida-based SCT’s Rick Trudo (right) and Mike Rogers (second, right) met in one-on-one discussions with buyers from throughout China who are increasingly seeking underhood products, such as ECUs, as engine performance grows in popularity.   SEMA News-December 2010-International-Selling to China
     
SCT’s Trudo presented some distributors with SCT shirts. “At SCT, we see China as one of our targeted markets,” he said, “and this trip justified our belief in that. I honestly believe that the growth opportunity there is bigger than what we have today, if done right.”   SEMA News-December 2010-International-Selling to China
     

SEMA Vice President of Marketing and Member Services Tom Myroniak (right) exchanged business cards with Albert Liu, president of Carboxing.   

  SEMA News-December 2010-International-Selling to China 
     

Trip participant and SEMA Chairman-Elect Scooter Brothers (right), COO of Comp Performance Group, talked with representatives of a Beijing-based retail business. “Prior to this SEMA conference, I still wasn’t sure if our future was going to be buying or selling in China,” he said. “After meeting one on one with some of the ‘real’ performance parts guys, it’s becoming clear that there will be a Chinese market for performance aftermarket parts. The meetings we had put us face to face with some of the early players in the Chinese automotive market, and it looks like they have the performance bug just as bad as we do in the States. Now we have the first step and can go back next year with a clear direction and put some meat on the skeleton. That is clear to us now.”   

  SEMA News-December 2010-International-Selling to China 
     

Gino Jiang of Team Jr. (left) posed with SEMA’s Chris Kersting, proudly displaying a certificate he received recognizing his company’s participation in the 2010 CIAPE SEMA China Business Development Conference.  

  SEMA News-December 2010-International-Selling to China 
     

Bob Bruegging (left) and Danny Chen (second, left) of Prestolite Performance answered questions posed by Chinese buyers during a one-on-one session. Prestolite makes flywheels, gaskets, heat shields and distributors, among other racing, performance and appearance products for U.S., Japanese and European vehicles. “Prestolite Performance made the trip to China as part of the SEMA contingent to learn about the state of the performance market and potential distribution partners that may be in place or that could be organized to perform such a role,” said Bruegging. “We also were curious about how many of our current product lines and actual products could be sold into this market. What we discovered was very encouraging to us. Several of our product categories can be easily adapted to the market in China, and we believe that the market will evolve rather quickly. Chinese laws have changed over the past several years, and personalization of vehicles is taking place right now. As discretionary income rises, so will the ‘want’ to personalize vehicles. It is the right time to make things happen.”

  SEMA News-December 2010-International-Selling to China
     

From right: Nitto’s Tanaka; Gloria Miyamoto, marketing manager; and Conrad Galamgam, tech department senior director, talked with a local buyer about Nitto’s products. The three traveled to China to explore the market for high-performance off-road, street and competition tires.  

  SEMA News-December 2010-International-Selling to China 
     

SEMA’s International Director Linda Spencer posed with Eibach Springs CEO Wilfred Eibach at the conclusion of a one-on-one meeting.   

  SEMA News-December 2010-International-Selling to China 
     

Ray Gross (second, left) of Powersheen answered questions about his company’s products at an informal session with media.  

  SEMA News-December 2010-International-Selling to China 
     

A distributor examined Injen’s products as Ron Delgado (in red), the company’s president, explained Injen’s air intake system features during a 35-minute one-on-one meeting. Nine of these sessions were held back to back, but many SEMA manufacturers met with many more buyers throughout the day due to the high number of buyers interested in meetings with SEMA participants. “I can’t say enough about our trip to China,” Delgado said. “I never imagined that this country would be so full of life and brimming with trendy people driving all makes and models of cars. Beijing is a jungle of modern high-rises, buzzing with activity 24/7. The volume of traffic is insane. It is definitely a new frontier for Injen to explore and conquer. We have established some very positive business contacts but, more importantly, we have made some life-long friends. The future looks very promising in China. This is just the beginning of our commitment to take the Chinese market by storm!”

   SEMA News-December 2010-International-Selling to China
     

Kenneth Merritt (middle), Bushwacker’s vice president of OEM sales, saw great potential for his company’s products in China. The Oregon-based company manufactures fender flares and other products for Jeeps and other light trucks. “My goals while in China with the SEMA delegation were to connect with existing customers and meet new ones,” said Merritt. “I was very pleased with the results. The one-on-one scheduled meetings with Chinese buyers that were coordinated by SEMA went very well because of the pre-screening. All of the buyers we met with were a great fit for our products. The Chinese market for Bushwacker fender flares continues to grow, and I continue to expect our sales in China to grow at a faster rate than our domestic market due to the rapid growth in demand.”  

  SEMA News-December 2010-International-Selling to China 
     

In addition to attending one-on-one meetings, each SEMA manufacturer participated in networking events, such as the one pictured at which E n Kenneth Merritt (middle), Bushwacker’s vice president of OEM sales, saw great potential for his company’s products in China. The Oregon-based company manufactures fender flares and other products for Jeeps and other light trucks. “My goals while in China with the SEMA delegation were to connect with existing customers and meet new ones,” said Merritt. “I was very pleased with the results. The one-on-one scheduled meetings with Chinese buyers that were coordinated by SEMA went very well because of the pre-screening. All of the buyers we met with were a great fit for our products. The Chinese market for Bushwacker fender flares continues to grow, and I continue to expect our sales in China to grow at a faster rate than our domestic market due to the rapid growth in demand.” ibach’s Julian Gil (second, right) chatted with a Beijing-based retailer.  

   SEMA News-December 2010-International-Selling to China
     

Each company was provided with a private meeting room and a series of 35-minute meetings with pre-screened buyers. Kevin Floody (left), the international business manager for K&N Performance/AEM Air Intake Systems, is shown here in a one-on-one meeting. “I was very impressed with how fast the China market has grown over the past few years, especially since my initial visit in early 2008,” Floody said. “We were mainly looking to see what other opportunities may exist for our products, since China is such a large country with great growth potential. This SEMA-sponsored trip was a great way to evaluate interested companies in a narrowed focus. For K&N, the opportunities appear to be endless. I was amazed at how many companies already know the brand and want to have access to it.”  

   SEMA News-December 2010-International-Selling to China
     

Buyers traveled from throughout China to participate in the SEMA CIAPE China Business Development Program. Holley’s Shanghai representative, Gang Chen (right), discussed the Kentucky-based company’s performance and replacement engine products with a buyer from northeastern China.  

  SEMA News-December 2010-International-Selling to China 
     

Jeremy Barras’ (second, right) schedule was packed with buyers interested in AEM Electronics and StopTech, the two brands he represented at the show.

  SEMA News-December 2010-International-Selling to China 
     
Greg Sandbutte (second left), vice president of international business at Amsoil, spoke with buyers about the company's wide selection of synthetic oils.   SEMA News-December 2010-International-Selling to China 
     

Bogdan Durian, president and CEO of Delta Tech Industries, and his wife, Olga at the opening reception. Delta Tech is a manufacturer of automotive lighting for a number of light trucks, including the Jeep Wrangler, which is very popular in China. “My primary motivation to join SEMA’s conference in China was to explore firsthand the opportunities that this vast market and rapidly emerging economy had to offer for American-made off-road and accessory lighting products,” Bogdan said. “Our goal was to define the market and to identify prospective customers through SEMA’s pre-arranged conferences and by attending the CIAPE automotive show. All my goals were realized beyond my expectations. We are now in the process of setting up two or three distributors in Shanghai and the Beijing area. I definitely feel that there is a good market potential for high-quality American-made specialty products in each vehicle-specific niche. There is a great appreciation among the more affluent younger Chinese generation for good-quality American and European products.  

   SEMA News-December 2010-International-Selling to China
     

Volker Wegerhoff (second, right), head of sales for Bilstein, and Martin Hyar (right), the firm’s regional sales manager, discussed their line of shock absorbers and struts with buyers from all over China.  

  SEMA News-December 2010-International-Selling to China 
     

Gary Kong (right), director of international sales for American Racing/Wheel Pros, talked with a Shanghai-based company before the start of the one-on-one meetings. Kong’s company makes products for Jeeps and other off-road vehicles, among other applications. “The desire for high-quality, reputable-branded auto parts from Chinese consumers is high,” Kong said. “The quantity of customers who can afford premium goods for their vehicles is growing fast. However, knock-offs, unauthorized sales from sub-contractors, lack of industrial and safety standards, variances in law enforcement and the highly competitive environment all pose challenges in exploring this big potential market.”  

  SEMA News-December 2010-International-Selling to China 
     

Jennifer Chang (middle), senior manager of eBay Motors, talked with the Beijing-based staff of a Hong Kong firm. “For eBay, Asia has always been a great place to source low-cost replacement parts to sell to U.S. consumers,” Chang said. “But after going on this trip, I realized what a huge opportunity there is for U.S. aftermarket brands to sell to Chinese consumers as well. Given that eBay is a global marketplace, we want to help facilitate this kind of trade between U.S. and Chinese aftermarket companies. I came on the SEMA trip hoping to meet potential partners for eBay, and I have come away with a great list of contacts to follow up with after speaking with various Chinese manufacturers and buyers as well as a much better understanding of just how big the opportunity is in China.”  

   SEMA News-December 2010-International-Selling to China
     

David Thawley of eBay Motors (far right) provided an overview of the company to potential customers as Famous Rhodes, Director of eBay Motors, looked on.  

   SEMA News-December 2010-International-Selling to China
     

SEMA Senior Vice President of Operations Bill Miller (right) chats with Post Release’s Tyler Tanaka, who is also the account executive for trip participant NITTO Tires as well as the chair-elect of the SEMA Street Performance Council. Commenting on the structure of this year’s SEMA trip to China, Miller noted, “The one-on-one meetings provided both the SEMA manufacturers and Chinese distributors and retailers great insight and a better understanding on how to capitalize on the immediate and long-term opportunities in China.”  

   SEMA News-December 2010-International-Selling to China
     

Kerry Wang (far left), president of the China division of Rennen/Donz Wheels, spoke with buyers in a one-on-one meeting. The company manufactures forged and cast wheels for high-end vehicles.  

   SEMA News-December 2010-International-Selling to China
     

From right: Eibach Springs Inc. China-based President Fong Yuen Wai, the company’s CEO, Wilfred Eibach, and General Manager of Eibach U.K. Julian Gil met with buyers eager to source products from the company.  

  SEMA News-December 2010-International-Selling to China 
     

Ron Coleman, CEO of Comp Performance Group, talked with Peter MacGillivray (right), SEMA’s vice president of communications and events, in a ceremonial room at the Great Hall of the People.  

   SEMA News-December 2010-International-Selling to China
     

SEMA’s Bill Miller signaled to BDS’ Vice President of Business Andy Barbieri (second, right) that five minutes remained before the next meeting. Each SEMA manufacturer met with pre-vetted buyers in 35-minute one-on-one sessions. Barbieri was in China to determine how Chinese retailers and distributors go to market and also to gauge how big the demand for BDS suspension products is in China. At the conclusion of the trip, he noted that there was definitely a market for the company’s products. “I was surprised at the level of enthusiasm from the buyers we met with to source American-made lift and leveling kits that their consumers are asking them to import into China,” he said.  

  SEMA News-December 2010-International-Selling to China 
     

Girard Systems CEO Marcia Girard discussed the China market and her company’s full line of accessories for recreational vehicles with a local buyer at the SEMA CIAPE program while National Director of Sales Major Pogue (middle) looked on.  

  SEMA News-December 2010-International-Selling to China 
     

Ray Gross (right), president of Idaho-based Powersheen, talked with buyers interested in learning more about his tire-coating products.    

  SEMA News-December 2010-International-Selling to China 

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