SEMA News—October 2011

An Automotive Opportunity

Revving Up the International Growth Engine

   
To learn more about expanding to international markets, SEMA members are invited to attend a UPS-sponsored session entitled “Beyond Borders: The Logistics Behind Global Growth” at the 2011 SEMA Show on Monday, October 31 at 11:00 a.m.  
     
Faced with the uncertain U.S. recovery and a relatively soft market, many companies are looking to international markets to grow their businesses. This is particularly true in the automotive industry, as emerging global economies create new middle classes of consumers eager to purchase and modify cars, trucks and SUVs. Automotive specialty-equipment companies stand to benefit from entering these global markets—if they can successfully navigate the often-complex regulations and procedures involved in exporting goods overseas.

Getting Started: Emerging Global Market Opportunities

There are many factors to consider before expanding internationally, including markets to focus on; how to best establish operations; and the numerous logistical challenges and considerations of doing business overseas. To begin, companies should consider exploring regions experiencing significant growth in automotive demand. Reports from January 2011 showed that Chinese auto sales were 36% higher over January 2009 sales, and the analyzed yearly automotive sales for China in 2011 are forecasted at more than 17 million vehicles, according to a report from Booz and Company & Synergistics Ltd.

China is not alone when it comes to automotive demand: Brazil experienced record automotive sales in the first half of 2011, according to Associação Nacional dos Fabricantes de Veículos Automotores (ANFAVEA), Brazil’s automakers’ association. ANFAVEA reported that sales increased by 10% between January and June of 2011.

As income levels in emerging markets, such as China, Brazil and the Middle East, continue to rise, so too will the demand for automotive specialty-equipment parts. This presents significant growth opportunities for automotive equipment manufacturers and distributors. In response, SEMA provides its members with opportunities to expand their customer base and increase revenue.

“Growing consumer interest in vehicle customization and increasing disposable income among enthusiasts to afford these products is leading to record demand and business for American specialty-equipment manufacturers,” said Linda Spencer, director of international relations for SEMA.

SEMA offers its members various resources to enable international sales. One of its newest initiatives offers members one-on-one, low-cost networking events in China and the United Arab Emirates. These events are designed to bring together SEMA-member manufacturers with local retailers and distributors.

Another resource, the SEMA Show, which is held in Las Vegas, is a great venue for SEMA members to launch or grow their overseas sales. With 25% of the buyers at the Show coming from abroad, members can take advantage of seminars on emerging markets and exporting logistics held throughout the week.

“More than 1,000 buyers and global media from nearly every continent are represented at the International Happy Hour, quickly becoming the largest annual international networking event for specialty-equipment companies,” said Spencer.

Logistics Matters: Partnering for Overseas Success

Shipping goods across international borders can be both confusing and intimidating, but UPS provides a variety of solutions to make the process faster and easier than ever before. With the world’s largest transportation and customs brokerage networks, SEMA members have access to more than 220 countries and territories and a network of experienced brokers to expeditiously clear shipments. Multiple transportation modes are available with a variety of time-definite delivery options.

UPS also maintains more than 32.6 million sq. ft. of distribution and warehousing facilities that are strategically located at 819 sites in more than 120 countries. This allows for optimal staging of inventory, which can help reach international customers faster while lowering overall transportation costs.

The Role of Technology

When it comes to supply-chain efficiencies, companies should look at technologies that allow them to streamline the shipping process and avoid customs delays. UPS WorldShip is one such tool. It connects to order entry and accounting systems to speed order processing time and reduce errors.

“With UPS WorldShip, we went from a dozen people processing 200 orders a day to a dozen people processing 800 orders a day,” said Jacky Lau, K2 Motor executive director, an online source of aftermarket automobile parts and accessories and a SEMA member.

Another example is UPS Paperless Invoice, which transforms lengthy customs documents into electronic data to clear customs faster and speed the shipping process. AAC Enterprises, a new SEMA member and quickly growing company in Louisiana, found that 20% of its business is comprised of exports. UPS Paperless Invoice helps AAC avoid the number-one reason for delays: incomplete paperwork. And, information for each shipment is also organized and stored in one place—saving time and paper.

Another tool for exporters is UPS TradeAbility, a web service that helps companies quickly identify harmonized tariff codes, generate landed cost estimates and locate compliance information. TradeAbility tools are available on www.ups.com or can be integrated into a customer’s business applications or website using Web Services.

Learn More at the 2011 SEMA Show

To learn more about expanding to international markets, SEMA members are invited to attend a UPS-sponsored session entitled “Beyond Borders: The Logistics Behind Global Growth” at the 2011 SEMA Show on Monday, October 31 at 11:00 a.m. The session will feature a panel of industry experts who will discuss which regions are experiencing significant growth, the most efficient and cost-effective way to get products there, key trends in global markets, best practices for international logistics and pitfalls to avoid when shipping products overseas.

Kristin DeBates is corporate marketing manager for the UPS automotive industry.

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