Frankfurt, Germany -- In a U.S. Presidential election year, it’s easy with the endless stream of political ads to feel like government operates at peak inefficiency. Candidates blast each other over failed policies, failed plans for the future and inept action in Washington, D.C. Hot topics center around national debt, joblessness, tax cuts/increases and foreign relations failures. It’s draining and enough to make the average American question if anything gets done at all.
Despite the politicking and pessimism, the automotive industry is moving forward. And a group of government entities, determined to enhance international trade and global business relationships, is letting it be known they can help.
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Michael Thompson, director, trade fair certification, with the U.S. Commercial Service, said the Department of Commerce has unified efforts among various agencies to support companies like those exhibiting in Germany. Of the 4,593 Automechanika exhibitors, 145 came from the United States. The U.S. government spent the entire show coordinating meetings between U.S. automotive industry firms and international business reps.
Speaking with Advanstar Automotive Group at the show, Thompson says the government’s goal for an event like Automechanika, is to bring added value to U.S. exhibitors seeking export options.
It’s essential early on to measure the readiness of companies interested in international trade. The goal is to find the right foreign partners and to make sure the manufacturer is prepared to handle exporting challenges. Once the early intake process is completed, the government shares that information with targeted market contacts in foreign countries. After those connections are made, discussions turn toward market intelligence. And no punches are pulled during the process.
“If there is no potential in a given country for a specific product, our contacts will tell manufacturers that,” says Hollowell.
Once product interest is established, potential partners, such as distributors, are identified for the exporting firm. The U.S. government helps vet foreign partners to make sure they are suitable, but in the end, exporters determine their final partners.
“We’ve given you these hot leads, now it’s your job to move forward,” says Hollowell.
Bill Bostic, U.S. Census Bureau, associate director for economic programs, says his agency’s vast trade data can help companies formulate their exporting plans. The Census Bureau has access to data on more than 10,000 products, says Bostic. They can help manufacturers gather market share details, analyze foreign competition and get a clear picture of the outlook for their products in a given region.
The Census Bureau also has tools that help exporters understand all the regulations associated with doing business outside the U.S. All export information must be filed through the Automated Export System (AES), which is an electronic method for filing export information with the Census Bureau and Customs and Border Protection. Bostic’s team can help U.S. companies avoid regulatory problems. While some of the services have nominal costs (for example, custom research that only aids the individual manufacturer) other assistance is offered for free.
Putting an exporting plan in place is important, but having the financial resources to execute the plan is vital. That’s where the Small Business Administration comes in as a source for potential funding of business growth.
John O’Gara, regional manager for the SBA’s Export Solutions Group, was in Germany to talk with companies about financing options the SBA offers. For instance, the SBA is providing $30 million in STEP grants to states, territories and the District of Columbia, to help increase exporting by small businesses.
The grants were authorized by the Small Business Jobs Act of 2010 under the State Trade and Export Promotion Program (STEP). The STEP program aligns with President Barack Obama’s National Export Initiative, which calls for doubling U.S. exports in five years. The program provides federal government funding for 65 to 75 percent of program costs, with states supplying the remainder.
According to O’Gara, manufacturers who qualify can use the money in various ways. For instance, money can be used for market development costs, translation of websites to new languages or for exhibition costs at trade shows around the globe.
“We want to make sure they are ready for the money and there’s a return on investment,” says O’Gara.
Going Global
Companies we spoke with at Automechanika understand the challenges associated with exporting. They like the global nature of the show, which drew more than 148,000 people from 174 countries, and the ability to connect face-to-face with accounts they don’t often see.
Jason Horner, vice president of sales for A&E Tools, was one of 61 U.S. exhibitors inside the U.S. pavilion. Horner likes the convenience of Automechanika as he seeks out distributors in Eastern Europe and the Mediterranean. A long time private label company, A&E has renewed its focus on its own brands – Kastar, Star and Hazet-NA – while trying to build its base of international distributors.
“I really like meeting with our existing distributors here,” he says.
Michael Mermuys, executive vice president, Bars Products, concurs. His company, started by his grandfather in 1947, distributes products in more than a dozen countries worldwide, including Mexico, Australia, New Zealand, China, throughout Scandinavia and Europe. They acquired Rislone in 2006 and use it as a global brand, while Bar’s Leaks remains domestic.
At the time we spoke, Mermuys was hoping to attract a couple new distributors for his products. “We’re looking for long-term companies we can trust with our nameplate and that we can do business with for the next 30 years,” he says.
Mermuys says one key point other manufacturers must understand about dealing with international partners is that business frequently is built over time with lasting relationships. The short-term, quick approach to business common in the U.S. doesn’t fly with international partners. He likens the approach to conducting business in the 1950s.
One case in point is a Swedish distributor Bars Products uses. “It took two years of working with them before we started getting orders,” he recalls. It took time to develop the proper packaging and product strategies that were going to work in the target markets.
