SEMA News - August 2010
By Alysha Webb
The View Abroad With SCT President Rick Trudo
SCT will be participating in the September 23–26 SEMA Beijing-based CIAPE China Business Development Conference. SCT wants to introduce Chinese distributors to SCT products and capabilities and obtain the kind of information it needs to provide the right products. Pictured (far left) is Brian Wald, president of Wald Diversified who participated in the 2009 SEMA trip to China. He is seen here chatting with a local Chinese firm.
Facing a slowdown in sales at home, we have seen a number of SEMA members successfully branch out and diversify their customer base,” said Linda Spencer, SEMA’s international director. “Selling overseas not only adds to the bottom line, but it can also lead to product improvement and innovative ideas, even in the United States.” The SEMA Show is an international event. In 2009, some 15,000 international visitors attended, including exhibitors, buyers and media. More than 20% of the buyers were from outside the United States. Canada contributed the greatest number of international buyers, with more than 4,000. But Australia, Brazil, China, Japan, Mexico, Germany, the United Kingdom and South Korea were also well-represented.
SEMA member SCT LLC took the overseas plunge in 2004 when it began selling in Australia. It has added one or two overseas markets every two years since then and now derives 4%–8% of its revenue from overseas operations, said President Rick Trudo. That’s up from about 2% a year ago. While it was initially tough to convince everyone at the company that selling overseas was a good idea, going into foreign markets is sound business strategy, he said.
“A company needs to have five avenues of revenue stream,” said Trudo. “Not just the United States, not just off-road. You need a wide range in each segment.”
SCT, located in Longwood, Florida, provides tuning software and performance calibration tools for most Ford, General Motors and Chrysler gas and diesel cars and trucks. Its largest market is North America, followed by Australia and New Zealand. SCT did about $1.2 million in business in Australia and New Zealand last year, said Trudo. Its largest overseas service is custom tunes on Ford models in Australia. Europe, the Middle East, Taiwan, South Africa and the United Kingdom are also important overseas markets for SCT. And China looks to be an up-and-coming market.
“Off-road and souping-up vehicles in China and the Middle East are the two markets where we think the biggest growth will be today,” said Trudo.
Different Markets, Different Demand
Each market has its own demand characteristics. In the United States, off-road accounts for around 30% of SCT’s revenue, said Trudo. Americans like the extreme off-road tunes, but that is not as big in overseas markets, he said.
In Australia, products that make a car go faster are in bigger demand. The United Kingdom has more manual transmission small cars than in other markets. The Taiwanese, meanwhile, like to trick out their cars with low-ride tires, strap-ons and bigger exhausts, said Trudo.
SCT finds distributors and dealers in these far-flung places in a variety of ways. The SEMA Show is one source. In 2009, 23% of the visitors to SCT’s booth were international, said Trudo. Among them were a Russian distributor and a Russian dealer, each of whom bought $40,000 worth of tuning software from SCT.
Other avenues are less traditional. SCT has five distributors in the Middle East. One is a Saudi prince who contacted SCT after hearing a U.S. serviceman “who likes to drive fast” talk about his vehicle, said Trudo, and he applies the personal touch for all of them.
For example, SCT brought its Australian distributor to its U.S. factory, taught him how to market and distribute SCT products and then helped him set up a webpage. Trudo’s wife came to the SEMA Show so that the Australian distributor’s wife would feel more comfortable in Las Vegas. The result? An additional 50 SCT dealers in Australia and a five-fold sales increase. SCT does up to $45,000 of business a month in Australia, said Trudo. “That’s huge for us,” he said.
SCT looks for dealers who are already selling complementary products, Trudo said. For example, cars with superchargers by companies such as Vortech Engineering and Magnuson Products Inc. need the kinds of adjustments that SCT software can provide. Companies selling products from Banks Engineering are also good candidates.
Finding partners in foreign countries is not always easy. Communication is always an issue, said Trudo. Sometimes that’s because the other partner actually speaks another language. Even when both parties speak English, however, the terms used to describe technology can be different.
“Engineers talk in a different world from everybody else,” Trudo said. “When our engineers need information to make a tune better, to understand what they want to add on, the communication barrier is tough.”
But the no. 1 hurdle to setting up an overseas distributor is the lack of a face-to-face meeting, said Trudo. That’s why SCT always tries to meet a potential distributor in person.
“Off-road and souping-up vehicles in China and the Middle East are the two markets where we think the biggest growth will be today–Rick Trudo
The SEMA-sponsored International Happy Hour during the annual Show in Las Vegas is one way SEMA members can meet potential overseas partners, said Spencer. SEMA also sponsors a SEMA Show online matchmaking program, which allows exhibitors and international visitors to connect beforehand and set a time for a face-to-face meeting during SEMA Show week.
SEMA is also holding the SEMA-CIAPE Business Development Conference in Beijing, China, in late September for companies interested in the China market. “This is a very hands-on program in which SEMA staff works closely with participants to identify the types of buyers they would like to meet out of a pool of nearly 1,500 wholesalers and retailers,” said Spencer.
Trudo will be at that event. He wants to introduce Chinese distributors to SCT products and capabilities and the kind of information SCT needs so that it can provide the right products. “If we really want to take it to another level, we have to find a common language that works for them and for us,” he said.
There are Buick-, Chevy- and Ford-badged cars made in China. Trudo figures they could be good targets for SCT tuning.
For more information on SEMA’s international programs, contact Linda Spencer at firstname.lastname@example.org.