Thirteen SEMA-member companies recently traveled to Beijing, China, for a firsthand look at the developing Chinese market for specialty products—or, as referred to in Chinese, Gaizhuang.
In its infancy, the Chinese market for performance and accessory products is not so unlike the U.S. market of 40 or 50 years ago. On one hand, it is brimming with opportunity as millions of consumers develop a growing taste (and the necessary disposable income) for vehicle personalization. But a closer look at the market reveals a sector riddled with sporadic government crackdowns on car modifications (in Shanghai in 2007 and most recently in Beijing); numerous performance products still technically illegal; far-flung population centers only partially served by the fragmented network of distributors; and the presence of frequent intellectual-property violations. It’s essential that companies take the necessary steps to minimize their potential IPR vulnerability in China and worldwide. Yet, despite this, the delegation overwhelmingly concluded that the largest mistake SEMA members could make would be to underestimate the market and the potential it holds for many SEMA members.