The ultimate guide for importers of auto parts

By Fredrik Grönkvist

Learn insider tips on getting the best deals for auto, ATV & motorcycle spare parts in China

Looking for Auto, motorcycle or ATV spare parts?

Chinese suppliers might have exactly what you’re looking for. While this is a product that can be purchased both from manufacturers and “off shelf” from Trading Companies, the industry is infested with unscrupulous and disorganized suppliers. In this article we look into the do’s and dont’s when buying vehicle spare parts from China.

Buying from a manufacturer

Buying directly from the manufacturer comes with some obvious benefits. The product selection is wider (I explain why in a minute) and the prices are lower due to the lack of middlemen. However, it’s not viable for most small businesses importing vehicle spare parts from China. The reason is spelled “MOQ”, or “Minimum Order Quantity” Requirement.

A supplier must produce a certain minimum quantity of a product in order to make the production run viable. This “minimum quantity” tends to be 300 – 500 pieces for each part. Assuming that you wish to offer a wide range of different parts, the required investment can skyrocket to several millions of dollars if you would buy every single spare part directly from a manufacturer. However, there are other ways to do this.

Advantages when buying spare parts directly from a Manufacturer

• Lower prices
• Product certification compliance (when required)
• Full product availability
• Disadvantages when buying spare parts directly from a Manufacturer
• High MOQ requirements (300 – 500 pcs per part)

Buying from a Trading Company

While it’s in general not possible to find “off shelf” products in China, vehicle spare parts can be purchased “off shelf” from Trading Companies. A Trading Company offers smaller volumes compared to manufacturers. Sometimes the MOQ requirement is as low as 5 to 10 pcs per spare part model. However, these Trading Companies are not working for free. The prices are often two to three times as high compared to if you would’ve purchased the spare parts directly from the manufacturer.

But that’s not where your trouble ends. I’ve had my fair share of dealing with auto, motorcycle and ATV spare part traders in China and it’s been far from pleasant in most cases. The main problem is that they are in general very disorganized. While the Trading Companies may have product catalogues, far from all are in stock at any given time. Basically, you get to buy the parts that are available. This can cause major disruptions in your supply chain and it can take months before you’re able to restock on certain spare parts.

While it would be fair to assume that a Trading Company should be able to deliver spare parts faster than a manufacturer (well, the parts have to be manufactured before they are delivered, right?) – it’s often the opposite Trading Companies often purchase spare parts from other traders. In most cases it takes at least a month before the Trading Company has gathered all the ordered parts.

Advantages with buying spare parts from a Trading Company

Click on this link to read the full article 

Fredrik works for Frontier's content partner, ChinaImportal - an e-commerce platform that assists businesses looking to import products from China.

Top ten export products to Angola

Download Frontier's free eBook now and get advice on how to export goods to Angola, a fast growing economy with attractive business opportunities.

More businesses are now exploring cross border trade to take advantage of the huge export and import opportunities in fast-growing markets in sub-Saharan Africa. Angola is one such market promising market. 

With an estimated 43% of its population under the age of 15 and a rapidly emerging middle class that is fuelled by oil wealth, Angola has a huge consumer base with money to spend. 

The South African Institute of International Affairs put the scenario in context in a recent report on Angola: “…despite only having a population of around 19 million, the country is the third-largest domestic market for alcoholic drinks, behind South Africa and Nigeria. With so little being made or produced locally, there is enormous scope for exports...”

As the oil-rich nation continues to grow (about 6.2% this year, according to the IMF), so does its appetite for South African made products. Angola aims to attract US$4-billion a year in non-oil foreign investments by 2017. Foreign direct investment, excluding oil, was US$1.9-billion by the end of September 2013.

China is the top source of imports. Statistics by the National Freight Council in Luanda show 810 000 tons recorded in the second half of 2013, a significant rise from last year. Portugal is the second-largest trading partner with 410 000 tons of products, 8.8% less than the 450 000 tons recorded in the same period in 2012. Brazil, Vietnam, Turkey, Belgium and South Africa followed closely. Imports totalling three million tons were recorded in the period under review. Hydraulic cement was the biggest import product, at 526 000 tons.

Frontier has put together the top ten products that are in demand in Angola, and expert advice on how to get your goods into the country. 

Download the Top ten export products to Angola report.

Frontier has helped to connect investors, business owners and distributors in many sectors. 

Register on www.frontiermarketnetwork.com and we will keep you up to date with opportunities and reports in your sector.

What and how to export to Sweden from Africa

There are great opportunities for fruit and vegetable exporters to sell to Swedish stores.

Sweden is a rich country with a well-educated and sophisticated population, but its supermarkets don’t have all the quality products that consumers want. Agricultural producers in Africa - particular in the food and beverage sector - have a great opportunity to export to the Scandinavian country and to its Nordic neighbours.

The Nordic region (Scandinavia plus Iceland) has a population of about 25 million, most of whom share tastes in food, have high incomes and long life expectancies. With the Swedish market for food alone being worth about $1-billion, there clearly are incentives for African exporters to sell their products into the region.

But barriers for entry into the European Union are high. Health and safety standards are high and consumers are discriminating in terms of quality. However, the rewards are great for farmers and food manufacturers who can get their products accepted. 

Swedes spend about 14% of their income on food, and many of them, about 34%, live alone so there are that many more people buying the groceries than might be the case in a society where large families are the norm.

Charlotte Kalin is the CEO of Chamber Trade Sweden. Speaking at an investment conference in November, Charlotte pointed out that every kilogram of coffee consumed in the country is imported, as are large percentages of the country’s fruit (95%) and vegetables (60%).

“That represents a big opportunity”, says Charlotte. She noted that a delegation of South African stone fruit producers had recently visited Sweden. “They know what Swedish companies are looking for when they import from SA”.

And what Swedish companies are looking for apparently is high-quality goods, and choice.  She pointed out that shoppers in South Africa have great variety when it comes to fruit and vegetables. “In your shopping here, you have a very sophisticated diversification in what consumers can buy. Shopping here is so much fun, there is so much to buy, you could really revolutionise the consumer choice, be it in spices, be it in fruits…”

Charlotte expanded on the shopping experience for a Swede in South Africa - which was something of a surprise for the South Africans in the audience!  Said Charlotte, “Shopping here is like in California, you just have it all, I am very impressed actually“.

Charlotte made a specific call to African exporters, “There is a lot you can do in engaging the Swedish consumer in persuading them to buy new brands.”

Trends in Swedish food retail

In encouraging African agri-producers to export to Sweden, Charlotte pointed out that there are certain key trends that are guiding the food market now. These trends are for;

• Exotic foods (including spicy sauces)

• Organic foods

• Gluten-free foods

• Energy bars and drinks

• Ready-to-eat dishes

A member of the audience at the conference, a Swedish manufacturer, suggested that exporters had a real chance to make inroads into the ready-food market, what with lower input costs for the packaging of food in Africa. South Africa, with excellent refrigeration facilities, has a particular advantage.

Retail specialist Nils Tunebjer, of strategic brand and design agency BAS, pointed out that exporters must also have something to distinguish them from the rest of the pack.

“There must be something more,” said Nils. “If you just come with a product and regular packaging, you will have a tough time!”

“South Africa is a premium country for fruit and vegetables and food and you can answer the question, ‘What should I use when I step in?’”

He stressed that Swedish consumers are very quality-aware and urged potential exporters to tell their story, be it of the process that goes into making the product or the story of the people involved in the making the product.

“Be transparent and open about what you are doing, tell your history,” says Nils. “It can be online, or it can also be in the packaging, which is an important touch point between the retailer and the customer.”

Sweden represents really ‘tough competition’. “The big retailers appreciate if you give them something more: how you merchandise in the store, how you interact with the consumer, how you give information. There must be something more!”

Continuing on the theme of trends as mentioned by Charlotte, Nils pointed out that there is a pizzaria and a sushi store in just about every village in Sweden. “There is great interest in foreign foods and new ways of consuming.”

He mentioned Asian and Thai speciality stores that sell spices like cardamom and saffron. In the health market, South African tea brand Rooibos is very popular. Nils loves Rooibos but complains because he can’t get his favourite tea in the morning. “In our office, even though we have 50 different kinds of tea, I can’t get English Breakfast! Swedes love lots of green teas, red teas, all sorts …”

Other trends highlighted by Nils that are driving customer choices in Sweden are:  

• fair trade

• ecological quality

• openness and information

• interesting back stories.

Nils pointed out that South African wines had created a lot of trust in the Swedish consumer, and generally Swedish consumers were very educated about the country they are importing from.

Price is still important according to Nils, but if producers are able to differentiate their product in one of these ways, then they will increase the chance of success.

Free export advice

Open Trade Gate Sweden is a section of the National Board of Trade of Sweden that offers a one-stop information centre for exporters interested in the Swedish market. It helps traders and aims to increase exports from developing countries to Sweden. Open Trade Gate Sweden specialises in trade rules and regulations, covering areas such as labelling, packaging, health and sanitary requirements and customs procedures.

The organisation has its headquarters in the Swedish capital, Stockholm.

If problems occur in the process of exporting, Open Trade Gate Sweden investigates and acts to overcome the problem. Open Trade Gate Sweden’s services are free of charge.

In 2003 the Swedish parliament decided that the entire government shares the responsibility to contribute to the objective of achieving an equitable and sustainable global development. All future policies would take into account the effect of policies on developing countries.

As outlined by Open Trade Gate Sweden, ‘within the area of international trade it [the policy] specifically says that the Swedish government should work for improved market access for developing countries and remove trade barriers to facilitate trade and try to increase exports from developing countries to Sweden.’

Information about Open Trade Gate Sweden services and general information about exporting to Sweden and the EU can be found on the website www.opentradegate.se

Visit www.frontiermarketnetwork.com to access a database of distributors, agents, importers and exporters in Africa.