Consultants To The Aftermarket     

‘China Syndrome’ is Not a Key Issue in HD Truck Parts

Survey shows shift in previous sentiments about China-made products

 By: Kelly Holliday

The concerns over Chinese quality that have been voiced after recent consumer product recalls does not deter heavy duty distributors and fleet customers from purchasing China-made products, according to a recent survey conducted by Wade&Partners.

Forty-two percent of distributors are concerned about what is being imported from China, as are a significant 64 percent of their customers. The survey respondents replied that their concerns lie in the quality of the materials used, the level of workmanship and the ability of the product to meet U.S. government specs, especially in safety related lines.

Domestic Brand vs. Country of Origin

However, the one thing that could trump all of these concerns is a domestic brand name that is well-known by both distributor and fleet customer.

“If people recognize the name, then it seems to fall into the ‘safe buy’ category...it will work the way it is supposed to and it will be dependable,” said Bill Wade, Managing Partner at Wade& Partners.

“Country of origin becomes an assumption,” Wade continued. “Certain brands scream ‘American’ even if they were previously domestically produced but are now imported. If a product was previously known as American made, it seems to stay that way in a counter person’s mind... Even after it is ‘off shored’.”

“Frankly, I was very surprised by the response we received. I was not expecting distributors to say that familiarity of a brand would so overwhelmingly take precedence over what is actually in the box,” concluded Wade. “Instances like the Mattel toy recall (millions of toys painted with high lead content coating) have just not had a crossover effect here yet”.  

When it comes to safety items (like wheel bearings, brake friction material or steering components), product lines are treated differently than others in terms of specification. Even at the distributor level, higher levels of qualifications need to be met in order for those products to be put on the market, according to the interviews conducted.

 “Made in America” Value is Defined

The surveyors also asked the question, “Does ‘Made in America’ still have selling power?” The answer is “Yes”, with 75 percent of participants saying that a product can still create a market simply by being American-made. Summarizing the respondents’ additional comments, the meaning of ‘Made in America’ to heavy duty distributors boiled down to:

• Superior Engineering/Quality
• Better Production Machinery
• Good Workmanship and ‘Finish’
• “In the heavy truck parts business it specifically means that the product is dependable, and there will not be lost money, comebacks or down time.”

The survey indicated that ‘Made in America’ still has selling power, but can it be sold for more money? The respondents could not answer that question as fast or as firmly.

The survey found that thirty-eight percent of respondents thought that even though the product is ‘Made in America’; it could not command a premium price. However, sixty-two percent of the people said either “Yes” or “Maybe”.

The reason for a “Maybe” answer was the thought that on some products that are for simple uses, a customer would probably go for the cheapest priced. But if the product was for an important, high priority or  safety use, there could be a premium.

According to the survey some stores have quit selling the products that they fear may not be up to par... popular brand or not. And some are taking an in-depth look at the products and the manufacturing processes to make sure that they are up to standards. Other stores have stopped selling China-made products all together, although most appear to be doing so as a point of differentiation in marketing their own services.

About the Survey

A statistically significant sample of heavy duty distributor branch managers were randomly selected and through a blind telephone survey asked several questions about the parts that they sell, Chinese quality issues and the value of an American-made product. Additional respondents came from interviews conducted with owners and top execs of independent heavy duty distributors. The survey was conducted on July 18 - 19, 2007.