2013 Performance-Tuning Parts Market to Stay Flat

Online shopping has eliminated need for jobbers and modification shops

Once maybe the fastest rising segment in the global auto-parts and -accessory market, performance-tuning items attracted intense attention from global buyers and created a booming sector that nourished a big group of suppliers and traders worldwide.

However, such prosperous times have passed since the global meltdown in 2008 that sapped consumer confidence. The global performance-tuning auto-parts market has sagged, a situation exasperated by automakers trying to spice up in-house product competitiveness with enhanced engine output and exterior styling. High fuel prices, anemic economies in the U.S. and Europe and uncertain prospects have all impacted yearning to spend on faster, fancier cars.

Such downturns are also seen from the sharply decreasing number of tuning-product exhibitors at major international auto parts and accessory shows, including the 2012 Automechanika Frankfurt in Germany, Specialty Equipment Market Association (SEMA) Show in the U.S. etc. Visitors to such shows remember the "Tuning" sections once dominated by hundreds of international players mainly from industrially advanced nations as Japan, Italy, and Germany, but have since been replaced by lower-cost competitors from Taiwan, Hong Kong, and China.

Gloomy Outlook
Bruce Liu, chairman of Camco Auto Sangyo Co., a Taiwanese trading company focused on high-end performance-tuning auto parts and accessories for over 15 years, says that the first-half global tuning market, with weak consumer confidence in Europe due to high unemployment in Italy, Spain and austerity, as well as the U.S. due to sequestration, is expected to continue to struggle.

Another continued phenomenon in the sector, like that in the worldwide consumer market, is the polar effect, with demand for automotive tuning products mainly from top-end owners who want to fine-tune, personalize their expensive, luxury cars, opposed to low-end owners of mainly youngsters trying to pay less to modify their cars to go faster or be more eye-catching.

"So players have to be more careful and adopt right strategies to better survive in a lull, while waiting for another crest in demand," Liu says.

Changing Market
Over the past three or four years, Chinese makers of tuning-items have almost overwhelmed markets with much more affordable products, but are actually seeking to dominate a segment that is shrinking substantially, except the tip of the market pyramid occupied by recession-immune consumers who buy luxury goods regardless. Ever more Taiwanese companies are aggressively moving upward to this tiny, high-margin segment by upgrading manufacturing techniques and strengthening innovation, with some having achieved success.

Generally, most consumers who want to modify or upgrade cars are younger, whose buying power is compromised alongside reduced parental income, with the phenomenon being global since economies have been on a downturn, according to Liu.

Moreover, the Internet has totally changed the transaction model of the small-batch, large-variety tuning-parts business. A young car fan can now easily purchase a high-end exhaust system, brand-new or secondhand, with few simple clicks on his computer. This business model has almost eliminated the need for jobbers in the tuning-parts business, as well as many car-modification shops when so many DIY parts available.

Right Formula
Sharing his experience in surviving amid bad times by foreseeing market trends and promoting suitable products, Liu says that Camco focuses on high-end performance auto parts and accessories to build steady growth.

In the past few years, according to Liu, Camco has achieved success in continuously launching performance-tuning total solutions for chassis, including high-end shock absorbers with aluminum bases, oversized brake rotors, forged aluminum multi-piston brake calipers, reinforced bushings for control arms, differentials and engine mounts etc.. These solutions, Liu says, provide car fans a very wide range of vehicle modification and upgrading options.

The core factor behind smooth sales of these high-end tuning chassis parts, Liu discloses, is that the company and its suppliers sponsor racing teams, enabling them to road test the parts on race tracks and under most demanding conditions. Every race offers precious data for further improvement of newly developed parts, Liu says, which means ever-refined quality, reliability and performance.

One example is the oversized brake rotors (with diameters ranging from 286mm to 405mm), which are made of high-grade FC-30 ferrous steel with high hardness and friction resistance compared to counterparts made of FC-20 steel. The company also supplies top-end 4-, 6- or 8-piston calipers made of high-grade forged aluminum alloy, with the best-quality oil seals made in industrially advanced nations to assure reliability.

Another group of the high-end turning chassis parts is top-end bushings of resin (hardness as high as 60-degree) used in control arms, engine mounts, tie rod ends etc., which greatly upgrade steering characteristics in high-speed driving.

Most of the items in Camco's high-end chassis tuning parts are developed for European makes and models, Liu says, and the parts are widely welcome by major customers in industrially advanced markets in mainly Europe, the U.S., and Japan, which are also Camco's major export markets.

Focus on High-end
"All global tuning-parts makers face fierce price-cutting competitions from Chinese counterparts, and the only way for local companies to better survive is to move upmarket, i.e. develop and manufacture high-quality and reliability products for luxury cars" Liu says. "The golden rule is higher technical level and higher quality can prevent a company from being supplanted by typical counterparts."

"Camco will never choose to develop or sell low-end items, and in the high-end turning segment, we choose only items that have passed tests on race tracks and by automotive testing units, such as the Automotive Research & Testing Center (ARTC) in Taiwan,” says Liu.

Being a trading company, Liu says, of course, service quality and credibility are undoubtedly also important for success. "Camco's lead will not be easily replaced by counterparts, because global customers know, especially in unfavorable business climate, Camco is one of the few partners providing the best and most considerate services, showing sincerity in maintaining long-term and mutually-trusting partnerships, delivering professional know-how and expertise, and always giving honest advice to save customers' costs. In addition, we have the best financial capacity that has helped us achieve trustworthiness amid customers."