The terms international and global may seem like ordinary terms when it comes to foods, supply chains, or big business, but how does it apply to us as engine builders?
If we take a step back and look at our industry as a whole, it is international, and it very much is global. Our American cars have had an international supply chain for a long time and the global supply chain for our cars and trucks seems to be getting bigger every day.
Here in the U.S., our pride for using ‘American made’ products is off the charts in comparison to other countries, yet the only way to stay competitive in most markets is to use imported products. Our government does not make it easy to manufacture here and it seems to only get tougher, so American companies will continue to buy from forging houses and manufacturers overseas. There are very few products that are not imported for retail sale that we use daily. Most aftermarket performance cranks and rods are imported, along with bearings, valvetrain components and other ancillary engine parts.
Oddly enough, some of the OE players that have a large presence in the U.S. have closed off some of the big mainland forging houses to the point where the forgers only have the capacity to fill orders for the OE, and not aftermarket. This takeover has caused a problem in the aftermarket where some of the big-name companies, such as Crower, that have supplied top-notch cranks and rods to us for years have been scrambling to find quality forgings. Anyone that buys from Callies knows how hard it is to get cranks from them as they are continually backordered due to the demand shifting for American cranks and rods. There are only a handful of companies that even sell 100% American cranks and rods anymore.
So where does this leave us in terms of international export of our engines? With the dollar strong, but other currencies stronger, it seems the international interest in engines and parts is picking up. I shipped a huge pallet of parts for a customer in France at the beginning of the year and shipped a twin-turbo engine to another customer in Canada this week.
We’ve oversaturated our market with everyone becoming an engine builder. Guys out of their garages, transmission and chassis shops are opening ‘engine shops’ and the list goes on; but that discussion is for another day. This local market saturation and the willingness of manufacturers basically selling to anyone (again, discussion for another column) makes us shift our focus elsewhere for business. Shops that don’t do performance work most likely don’t see the effect of the market saturation, but anyone in the performance market has. The global market has picked up and is ripe for the taking.
The presence of American muscle globally has grown exponentially over the last decade and continues to get bigger. We see more and more muscle cars in Europe and most significantly in the middle east. The UAE has an incredible muscle car following and it seems every day I hear about containers of engines and/or cars headed over to that region. The money they possess to buy products and engines built and manufactured here is astounding and doesn’t seem to have an end. Many shops have done well in this market and many make the trip across the world to work on and tune engines there as well.
The toughest hurdles to overcome are language barriers and time. Email makes this a bit easier to deal with as most of the people I have dealt with can articulate better in written form than voice. Sometimes, voice is the only way to answer questions and it can be tough to understand customers with heavy accents. It takes time and patience to listen to them and understand what they are trying to get across.
Shipping overseas can be easy and a complete pain in the neck at the same time. We have dealt with UPS, DB Schenker, FedEx, and a few others for global transport. The shipping end is easy if you abide by a few rules for international transport regarding your pallet or crate. The hard part comes in when you must supply them with the HTS code or harmonized tariff code, which tells the importing country what is coming in and how it is to be taxed. A commercial invoice, shipper’s letter of instruction and commercial packing slip are all required as well, but most of it is duplicated information and very similar to shipping within the U.S.
So, you’re thinking “how does this apply to me?” Well, it may or may not apply to you, directly, but it’s not going away. The choice is yours to decide if it is something that you will be willing to invest time and money into marketing to other parts of the world to increase your brand and your revenue. ν