All Quiet on the Eastern Front

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Forty-seven chinese OEMs and distributors belong to the MIC, but their members are seldom seen or heard. In fact, with the exception of KYMCO, there doesn’t appear to be much of a relationship between the motorcycle industry (the Big Four, the Europeans, Can-Am, the two American companies, the aftermarket and the consumer press) and the myriad Chinese and Taiwanese companies at all. We have seen Chinese and Taiwanese company reps at Dealer Expo, but they’re seemingly absent from any other industry events. Unlike the rest of the industry, there doesn’t appear to be much, if any, socialization between the two groups.

At a recent MIC-sponsored marketing forum in California, John Sinski, business and development manager for R. L. Polk, mentioned that his company tracked 170 different Asian brands, most of which I assume are Chinese. (For those of concerned about the Chinese invasion stealing market share, they collectively account for only 7.71 percent of two-wheeler registrations.)

Although their sales numbers are quite small, the sheer number of Chinese companies is astounding. I was curious as to how those MIC members interact with our industry through that group, and what contribution they make to our industry.

MIC President Tim Buche and Specialty Vehicle Institute of America Executive VP Paul Vitrano were able to shed some light on the subject. Buche says most of the Chinese members initially joined to gather marketing sales information and other data that might be useful in expanding their distribution. With other motorcycle issues on which the MIC works with OEMs — safety standards, equipment regulations and labeling — the organization hasn’t been as engaged with the Chinese as they otherwise might be.

On the other hand, the SVIA is actively involved in providing support to Chinese companies (and others) in understanding what’s necessary to prepare an ATV product to sell in the United States.

ATVs pose a formidable challenge for Chinese manufacturers because they make up the largest percentage of their motorized recreational product output — units are rumored to total in the hundreds of thousands. And until recently, the ATV standards and safety programs have not been defined by federal edict. They were instead composed of a set of voluntary standards and undertakings that the Japanese and North American OEMs and the Consumer Product Safety Commission had agreed upon.

In the past, many of the Chinese companies were unaware of (or unable or unwilling to comply with) the terms of the agreements, resulting in some inappropriate and potentially dangerous ATVs being sold to unwary dealers and consumers.

In October 2008, the CPSC gave notice that voluntary standards and regulations would be replaced with mandated standards, regulations, label requirements and penalties, all to be phased in by mid-April 2009. The new regulations include a supplier’s self-certified declaration of conformity to the new regulations for all units, done through a testing program stringent enough to detect faults that would cause the products to fail if they weren’t up to par. Each manufacturer or distributor also must have on file with the CPSC an action plan outlining the safety-related actions it agrees to take concerning ATVs. Additionally, certification of children’s product must be based on third-party testing.

An exporter’s failure to meet these standards and provide a certificate of compliance will result in the shipment being refused admission into the U.S. It is also now illegal to import an ATV unless it is affixed with a label certifying compliance. If a product is refused admission, it must be destroyed — unless the Secretary of Treasury permits the shipment to be returned to the shipper. If the shipment is ordered destroyed, all expenses incurred in the destruction, including per-diem, labor and travel, must be paid by either the owner or consignee.

In October, Vitrano accompanied the chair of the CPSC, Inez Tenenbaum, eight CPSC staffers and 20 other stakeholders to China to educate and help the Chinese with regard to the newly mandated regulations, standards and labeling. An entire day of this mission was devoted to the new ATV requirements. According to Vitrano, the Chinese officials who met with the CPSC delegation said there have been no ATVs exported from China to the U.S. in 2009.

According to Buche, the legacy SVIA members are supportive of efforts to make Chinese companies and others fully aware of and compliant with the new product regulation. The members are also offering their SVIA rider training programs to these foreign companies and distributors for a fee, knowing that noncompliant ATVs aren’t good for the public or the industry.

It seems to me that all of this is for the good. As an industry, we don’t want to see ATVs eliminated from the marketplace due to what might be considered faulty products. As a dealer, you certainly don’t want to see anyone injured or killed because of product failure. If you are selling Chinese-manufactured products, make sure that the vehicles you’re purchasing are in compliance with the new CPSC mandates. Whether or not the individuals in the U.S. who work for the Chinese get more involved with the rest of the industry remains to be seen — and will probably depend on the types of product imported in the future.