Dealernews - December 2008 - (Page 22) THE FINAL ANALYSIS JOE DELMONT WE GO SHOPPING IN CHINA A seasoned U.S. buyer shows us the ropes CHONGQING, CHINA — Paul Schoenbachler is used to dealing with unusual situations in China for Baja Motorsports, but this factory phone call sent his head spinning. Nine containers of ATVs — some 650 units — had toppled off of a ship on their way up the Yangtze River to Shanghai, for final shipping to the U.S. They were now sitting at the bottom of the river. The first problem was to find out who owned the machines — the factory, Baja, or Baja’s customer. The second was to confirm that they were properly insured. Schoenbachler is the main man in China for Baja Motorsports. The lanky 30-year-old Arizona native studied Chinese in college and set up shop in this manufacturing city about three years ago. He represents Baja in the company’s dealings with a host of factories here and elsewhere in China. Baja imports a wide range of powersports machines and sells them in the U.S. and Canada to bigbox retailers such as Pep Boys, Costco and Canadian Tire. The machines are serviced through nearly 1,500 independent service shops licensed by Baja. Last year, Baja bought nearly 100,000 units in China and generated more than $70 million in revenues. Most of those machines were bought in this gritty industrial area of 32 million people. Schoenbachler lives in the center of this city and takes a bus to his office at Hensim, the largest supplier for Baja. Hensim produces ATVs for Baja. Hensim, Loncin and HSUN were Baja suppliers; the others were potential sources. Prior to the tours here, Daugherty had checked scooter production in a factory near Shanghai and Schoenbachler had walked the huge Canton Fair in Guangzhou looking for new factories and new products. Daugherty looked at the factories with a practiced eye: He’s been doing this sort of thing for more than 10 years — four with Baja and six with Carter Brothers. Last year, he spent 71 days in China. On our factory (CPSC) legislation passed in August, but needed help understanding how to fully comply. One, however, had moved ahead of other companies by assigning an employee to translate the entire 62-page law from English into Chinese, and to work with company engineers to meet the new requirements. Of the China factories we visited, Hensim is one of the most sophisticated in its understanding of the U.S. market. That knowledge comes, in large part, from its close-working relationship with Baja and the training it receives from guys like Daugherty and Schoenbachler. On trips between meetings in vans provided by the factories, Daugherty sat in the back seat pounding on his laptop and working a Chinese cell phone and his U.S. Blackberry. Schoenbachler was lost in his own silent world of text messages in the front seat. It’s the only way they can keep up with factory questions, customer requests, government regulation changes and messages from Baja folks in Arizona. Daugherty gets more than 150 e-mails each day. Surprisingly, many of the factories that were planning new products for the 2009 U.S. season had not obtained DOT, CARB or EPA certifications. And some had not even begun the grueling process that often can take up to six months. visits, Daugherty checked capabilities and factory services, and discussed and rode new products for the U.S. and Canadian markets. Surprisingly, many of the factories that were planning new products for the 2009 U.S. season had not obtained DOT, CARB or EPA certifications. And some had not even begun the grueling process that often can take up to six months. Most knew about the requirements of the new Consumer Product Safety Commission THE FACTORY VISITS Each factory was different in its own way, and it’s important for the Baja reps to keep abreast of new capabilities and new products. During each visit, factory management teams took time to explain their production capabilities, marketing plans, and researchand-development programs. They also pushed new products that could appeal to Baja customers. Daugherty and Schoenbachler peppered factory representatives with sharp questions: Certifications? Product availability? Production capabilities? Colors? FOB Chongqing? Terms? Product modifications? Test rides? Parts availability? R&D capabilities? U.S. exclusivity? Quality control on components? These are the same types of questions any DEALERNEWS.COM A DAY IN THE LIFE In one five-day stretch last October Schoenbachler, his boss and Ryan Daugherty (who heads sales and marketing for Baja) toured 11 factories here. I traveled with Daugherty, as did Matthew Camp, an analyst with Power Products Marketing (PPM), the Minneapolis research firm that sponsored my trip. 22 DEALERNEWS DECEMBER 2008 http://www.dealernews.com
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