SEMA News—June 11
Chinese Car Dealers Selling Aftermarket Accessories?
Chinese new-car dealers are starting to realize that specialty-equipment market accessories can add value and help close sales, but the trend toward marketing aftermarket products in dealerships is clearly in its early stages.
“Accessories are their own category, and they are fashion!” he told his audience.
Nearly 800 dealers attended the conference, Wood estimated, and some took photos of his PowerPoint presentation with their phones.
“The people over there are really hungry for knowledge,” he said.
Wood included the logos of SEMA-member companies, such as Warn and K&N, as well as Mopar’s logo on one slide he showed the Chinese dealers. He said that products from American Expedition Vehicles (AEV), TeraFlex and Rough Country as well as accessories through Mopar, such as those made by Warn, are some his most popular accessories in the
Naturally, automotive manufacturers in China are encouraging dealers to sell more OE-branded accessories. Automakers discourage dealers from selling aftermarket-branded products, though some do. With new-car sales growing by more than 30% annually in 2010, it was hard to convince dealers in China to focus on anything but new-car sales. However, new-car sales grew by only 6.5% in March 2011, and dealers are looking for new profit bases. Wood emphasized the profitability of accessory sales, including aftermarket brands. Manufacturer-branded accessories are a start, he told the Chinese dealers, but adding aftermarket accessories gives the customer more variety, more current design and more competitive pricing.
Wood visited a standalone Chevy dealership and a standalone Chrysler dealership in Guangzhou, a large city near Hong Kong. “They are not in the accessories business at all,” he said. “Accessories are just not on their radar screen.”
He also visited an auto mall in Guangzhou. It sold aftermarket-branded appearance accessories, wheels and tires, electronics, polishes, treatments and the like. “There didn’t seem to be any connection between the showrooms and the accessories,” he said.
Even in standalone dealerships, accessory sales are still a tiny portion of Chinese dealerships’ businesses, said Chee Tuck Yap, managing director of dealer development firm Sewells Group’s China operations. “Only a small number of more talented dealers will package up a car with a good set of accessories and sell them as a package price on top of the vehicle’s recommended retail price,” Yap said. Many dealerships give away aftermarket and OE-brand accessories, such as GPS; car-care products; and common appearance-enhancing products, such as skirting, as part of the new-car sales negotiation, he added, though, they don’t give away anything fancy. “Many showrooms have an accessories display in the service area,” he concluded, “but this outlet for specialty products is clearly in its early staging.”
Get in on the Ground Level
SEMA is organizing a trip for U.S. manufacturers to China in September. Participating companies will spend a full day in one-on-one meetings and networking events with Chinese distributors and retailers from throughout the country. VIP access to the China International Auto Parts Expo (CIAPE), meals, hotel and an interpreter are included in this low-cost program, which will take place September 7–10 in Beijing. For more information, visit www.SEMA.org/china or contact SEMA Director of International Relations Linda Spencer.