Ford Raptor Following the Mustang to China

SEMA News—July 2016

INTERNATIONAL

By Linda Spencer

Ford Raptor Following the Mustang to China

Local Chinese Customizers and Enthusiast Media Welcome New Sibling

  Ford Raptor
The new Ford Raptor will be the first pickup to be officially sold in China by any overseas manufacturer.
   

The new Ford Raptor, built in Dearborn, Michigan, will be sold in China beginning next year, according to Ford officials. The Raptor will be the first pickup to be officially sold in China by any overseas manufacturer. Unveiled at the April 2016 Beijing Auto Show, the officially imported Raptor will go on sale in the United States later this year and in China in 2017. Ford will introduce only one model to that market initially—a four-door Supercrew with a turbocharged 3.5L V6 engine.

Iowa-based manufacturer Dee Zee is looking forward to the new Raptor landing in China’s Ford dealerships. The company plans to make side steps and toolboxes for the new Raptor and is excited about Ford’s decision to sell the Raptor in China.

“This is a great opportunity for all manufacturers in the auto industry and for customers in other markets,” said Troy Wirtz, Dee Zee’s director of aftermarket sales. “I’m particularly excited to see growth toward globalization and how this will help advance the China market.”

The Ford Raptor and other fullsize pickups, such as the Ram truck, are currently brought into China by parallel importers at a cost of up to $160,000 per truck. Not surprisingly at that price, purchasers of the Raptor and other fullsize pickups are often wealthy. Ford has not announced the price of the new Raptor for Chinese consumers.

The decision by Ford to officially bring the Raptor to China follows the company’s popular choice to make the iconic, U.S.-built Mustang available globally, including in China, and has been viewed enthusiastically by many in the industry in China.

“The New Ford Raptor is an exciting vehicle,” said Zeng Yong, owner of a Chinese-based pickup customizing company. “It will be a hot vehicle in the Chinese market.”

L.V. Bao of online off-road blog site FB Life was also excited about the Ford Raptor coming to China.

“We warmly embrace the Raptor coming to China,” he said. “It will lead to an explosive growth of pickups in China. We shall witness rapid growth of both pickups and upgrade accessories for pickups.”

While the vast majority of stakeholders SEMA News talked to were enthusiastic, one truck customizer, while happy to see more Raptors in the country, was hopeful that the entrance by Ford into the pickup market would not pull business away from independent customizers.

Stakeholders in the pickup market in China are hopeful that Ford’s official entry into the pickup market will help grow the market in a number of ways. First, they hope that Ford will join the chorus of those seeking to remove legal restrictions on pickups included in the 2003 Road Traffic Safety Law banning pickups from entering most Chinese cities. Motorists driving pickups in Beijing, Shanghai or other major cities face hefty fines.

“Most pickup owners purchase them as passenger vehicles, not as cargo trucks,” said Zhu Yunliang, owner of one of the biggest China-based pickup customizers. “When they drive on highways, they believe that they are driving passenger vehicles. This results in tons of tickets when they come back from their trips. As you can imagine, that discourages potential pickup buyers.”

“Ford should try to influence the decision makers to remove all of the in-place restrictions for pickups to enter big cities,” said Liu Haixiao, editor of enthusiast magazine China 4WD.

Restrictions are gradually being lifted. The government is currently conducting a pilot project in four provinces in which it removed restrictions on the movement of pickups.

“It is no coincidence that each of the four provinces chosen is home to a pickup maker,” Yong said. “There have been calls from these powerful businesses to remove these restrictions for four years. They have been pushing hard on these more-friendly policies toward pickups.”

Bao explained that the government used to put pickups into the category of cargo vehicles that are supposed to be driven only in rural areas or on farms.

“Now the government has realized that pickups are high-end passenger vehicles and contribute to the growth of the economy,” he said. “I believe that the pilot program will be introduced to other cities if it is a success. The Ford Raptor officially comes to China at the right time, when the pickup-friendly policy is underway. As you might know, one of the biggest complaints from pickup owners is that they cannot use them to their full potential. Most of the time, their pickups sit in the parking lot unused due to the restrictions.”

Indeed, Yang Zaishun, the associate general secretary of the China Passenger Car Association, was recently quoted in the Chinese internet portal Gasgoo as believing that the pilot programs in the four provinces foreshadow an upcoming nationwide policy on pickups in cities. He believes that the new policy will boost the production of pickups in the Chinese market.

There is hope that Ford’s officially bringing the Raptor into China will result in growth from the very rich customer base to also include more middle-class buyers.

“As pickups become legal on all Chinese roads, the Raptor and other fullsize pickups are expected to draw increased customers,” said Brian Godfrey, Rigid Industries senior marketing director. “The Raptor buyer is identical to that of the Jeep Wrangler. They look at the vehicle as a foundation for personalization. We expect the new Raptor to be as successful as the original. The educated consumers in China understand the value in our quality products and can easily see past [imitations]. I predict that these are the same educated buyers for the new Raptor.

“The pickup is a toy for the very rich, and it is usually their second or even third car,” said Meng Huan, editor of the tuning blog Autohome. “With more of the middle class moving to the suburbs and having room to park a pickup for the first time, industry insiders expect a drop in prices and other positive changes to expand the buyer base.”

Yunliang said that as prices drop, the target market of pickups will no longer be only the top of the pyramid but also the middle part of the pyramid. Consumers will now include others than the super rich.

Chinese buyers fall into two categories. The first is the super-rich risk takers who care only about whether the product is eye-catching and mind-blowing and if it stands out in traffic. But China 4WD’s Haixiao believes that a whole other category of buyers will seek out pickups. That category is successful middle-class people. They have money and love to stand out but also like to take all elements into consideration when it comes to a big purchase. They are conservative consumers who will look positively on Ford officially bringing the Raptor to China and providing aftermarket sales.

The Mustang sets a good example for the Ford Raptor. When the Mustang began to be officially sold in Ford dealers’ shops in China, there was rapid sales growth. Ford dealers, parallel traders and tuning businesses benefited from the introduction of the Mustang.

“Based on my statistics, Ford dealers sold about 20,000 Mustangs, and parallel trading companies sold about 5,000 Mustangs last year,” said Yong. “Tuning shops also saw a big increase in accessories for Mustangs. I believe that the same growth will happen with the Ford Raptor next year.”

“The Ford Raptor coming to China is good news for us,” said Qin Dong Fang, owner of a Shenzhen company. “It will put more pickups on the roads and promote the pickup culture. For each additional pickup Ford puts on the road, we have one more opportunity to accessorize it. Tuning shops will benefit from Ford’s coming. That is a sure thing.”

Yong also hopes that SEMA will bring pickup accessory manufacturers to China to coincide with the official introduction of the Raptor.

“We would like to do some preparations for the upcoming growth of pickups,” he said.

“U.S. truck accessory manufacturers are looking to take advantage of the new sales opportunities,” said Sally Goldberg, Truck Hero director of international sales. “Ford’s decision to sell the Raptor directly into China could only have a positive effect on aftermarket parts and accessories. Prior to this decision, the Raptor was imported by third parties, adding cost to the end product. This decision makes the Raptor a more affordable and desirable vehicle, so substantial growth not only in Raptor parts but all made-in-the-U.S.A. parts is expected.”

Another U.S. company excited about the new opportunities is MagnaFlow. “MagnaFlow looks forward to the release of the new Raptor in the United States as well as new international markets like China that have developed a cult-like following for this truck despite it never being directly sold there,” said Todd Payne, MagnaFlow international sales and co-manufacturing director. “If the success of Ford’s first global Mustang is an accurate indicator, the ’17 Raptor represents a fantastic growth opportunity.”

2016 SEMA China Business Development Program

SEMA is organizing a trip to China, scheduled for September 7–11, 2016. For more information, contact Linda Spencer via e-mail at lindas@sema.org or visit www.sema.org/china.

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