SEMA News—June 2015

CHRIS KERSTING

Overseas Markets: Take the Long View

We think most SEMA members would agree that we’ve arrived at an interesting time for the automotive industry. Supply has outpaced demand for oil; the dollar is one of the stronger currencies internationally; and automotive manufacturing is in a growth mode.

That’s very different from 2009, when new-car sales were down, the dollar was weak and oil prices were $100 a barrel and climbing. SEMA members had to adapt, be innovative and efficient, and had to look for alternate sources of revenue. It also sparked some of our members to recognize significant opportunities in expanding to overseas markets.

But selling abroad was more easily said than done, because product lines were often out of sync with demand for vehicle models in places such as China, Mexico, Brazil and the Middle East, and most companies had few trusted connections in place. The good news: SEMA’s international team had already laid the groundwork to assist our members in markets such as China and the Middle East, and smart companies jumped in and got started.

SEMA has since stepped up our international programs, providing extensive market information and getting members connected with overseas buyers. SEMA has even secured federal grants that directly help reduce the cost for our members to explore overseas markets. We’ve also used the grant funds to bring back to the U.S. popular foreign vehicle models so that SEMA members can measure them and develop parts. These programs have helped a good many members grow new business—and they are available to you today.

Now that the economic landscape features a strong dollar, relatively cheap oil and brisk new-car sales, let’s remember that change is a constant. It might seem less important to focus on international sales when the domestic market is strong. But if you take the long view, this is just the time to be exploring new opportunities, to develop relationships and be ready to capture sales when the markets next shift. At SEMA, we’re continuing to build ways to help you engage in emerging export markets—places where conditions are favorable for consumers with a passion for vehicle customization. We know that the connections we make today will be valuable down the line.

Currently, China and the Middle East are two marketplaces that are doing well and retain buying power. In the Middle East, we see a popular car culture that regards American-made equipment as the gold standard. And the market is accelerating in China, especially with regard to off-road vehicles. SEMA is working hard to bring about positive regulatory environments in both markets, and we’re having good success.

We are also developing new ways to make our international business-development trips even more valuable to members. Thanks to the recent awarding of a second U.S. government grant in the amount of $300,000, SEMA is now able to staff and undertake vehicle measuring sessions while our U.S. manufacturers attend our international conferences in the United Arab Emirates (UAE) and China.

The first of the new overseas measuring sessions took place in the UAE in March, when SEMA-member companies had access to eight vehicle models. SEMA Garage staff were also on hand to conduct scanning sessions to add to our library of CAD data—all of which is available to our members through the Tech Transfer program.

Moving forward, we will coordinate these vehicle measuring sessions so that international conference attendees can participate in one-on-one meetings with pre-vetted buyers and still take part in the all-day measuring sessions. Three sessions (in the UAE, China and Russia) are planned for 2016.

When we conduct the upcoming business-development conference in Shanghai this September, it will be 11 years since SEMA started our market-development work in China. During the past decade, the market has grown tremendously in sales and sophistication.

It’s a reminder that developing strong business relationships in a foreign market is a long-term project. Companies that invest in supply channels and build their brands through a consistent presence will be best positioned to take advantage of future growth, even when our domestic market dips.

—Chris Kersting, SEMA President and CEO