The Chinese Connection: Where your car parts come from

[Unabomber]

This is my first article that is really an inside investigation into the world of overseas manufacturing. All of this information comes from various clandestine sources within the Subaru parts industry. The intent of this post is information, nothing more. I do not wish to give Joe Consumer the ability to start cranking out $10 intercoolers nor tell on the big names in the industry who sell $10 intercoolers. It's just information that I found very interesting.

The first thing you have to wrap your head around is that everything comes from overseas. The term overseas really means southeast Asia or mainly China and Taiwan. Now you are thinking, he used the word everything...does he mean everything? YES...everything comes from there unless you have a company that emphatically states their stuff is made in the USA. Think hard....which companies do that? Now that you are done thinking and have come up with maybe 3 companies we'll continue.

So how does one get started with dealing with an overseas company? It's probably the easiest thing you will ever do in your life. Any search engine and the right search terms will lead you to many overseas manufacturers. Now I know you are thinking to yourself: "Self....I don't speak Chinese and dialing a 29 digit phone number scares me." Well, I can assure you that overseas parts manufacturers have the best communications of anyone in the history of ever.

Ever call your bank or email a credit card company and spend 6 days, 4 emails, and 9 stamps before you get a hold of the right person? You can instantly communicate with any overseas manufacturer 24/7/365 in any language from English to the Polynesian language of whistles and pops. Why is this? All you have to do is visit their contact us page. A typical contact us page will have company name, address, phone, and maybe email. An overseas manufacturer will have that and fax, TTY telephone, Skype, Facebook, Twitter, Myspace, AOL IM, ICQ, Google Talk, IRC, BBS, newsgroup, MSN, Yahoo, Navaho smoke signals, Canary Pigeon and their proprietary imbedded Flash/javascript chat program. All of these are constantly manned by people who are friendly, helpful, and have cool names like "Bill" and "Sally".

So how does one get started? One usually contacts these companies for two reasons. 1. A person or company makes a downpipe and wants to sell on the mass market. So they'll send a finished product overseas to have it made because it's cheaper. 2. A person or company buys Company XXX's downpipe and likes it so much, they want to have it replicated and sell it as their own.

For item 1 above, it can make a lot of sense. US labor is much higher as are materials, so cheaper sources can seem great. As to item 2 this happens....it's a fact and get further confused as the overseas manufacturers do it to each other and perpetuate and obfuscate the matter by knocking off the knock offs. Just think how many "brands" of headers and exhausts there are that are 90-100% identical. This will be covered later in this article though.

The first part is to send the company a proof product. The proof product can be a 100% perfect unit or some haggard looking boondoggle that fits well but looks like it was made by a dyslexic, myopic alcoholic who picked the wrong week to stop sniffing glue. Looks matter not at this point and no matter what you send them, the finish version that is returned will come back shining like the sun and will appear to be crafted by Michelangelo with Leonardo da Vinci as his helper. The reason for this is the finish version is constructed by hand by a master craftsman.

The thing no one seems to talk about with overseas companies that they actually employ REAL craftsmen who have state of the art mandrel benders, TIG welders, and other equipment worthy of the finest shop. The finish piece will arrive at your door and is designed to impress the hell out of the potential buyer. The reason for this is the finish piece is what you put in your hand and decide whether to order 100 or 10,000 units to be made. It MUST be perfect, so it will be. Once an order is placed, this is where the bait and switch occurs.

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[Unabomber]

So you will receive a proof product in mail in a quick and timely manner and it will be 100% perfect or very close. This is where you as the potential buyer will decide how many copies to order and what changes need to be made. Let's say it's a downpipe and you think the back most flange needs to be clocked 3 degrees left and the transmission tab needs to be stainless vs. mild steel. You discuss the changes with the manufacturer and place an order for 100 units. Several weeks later, you receive a box of 100 and can/will encounter the following joys of business: damaged items, wrong designs, and fitment issues. The bait and switch of most overseas manufacturers occurs in that after the proof product leaves the hands of the master craftsman, the production work goes out onto the general work floor where quality control is not in the lexicon. You get the 10 cent an hour crew making your parts based on specifications handed down from you via 19 supervisors. MIG welding is used vs. TIG. Mild steel is substituted. The jig crashes to the floor and the worker tack welds it back together. Quality Assurance is not there or they believe in the "as long as it looks good from the back of a galloping horse it's fine" way of doing business. What are you to do?

Well, remember going to that website and seeing the Version 2 downpipe or the Version 3 header? That's what you do. You end up selling 100 crappy parts because you have to. The manufacturer won't take them back and you have $8000 in downpipes at your front door. So you end up selling them and using the standby lines like "Gosh...I never heard of this not fitting a WRX before, you know manufacturer tolerances and such sometimes mean our perfect part needs a little massaging to work right". People know that rather than ship a downpipe back to the seller they are going to hammer or mill it out to get it to fit. Or these may become "eBay specials" that are sold under some generic name to distance the work from the main company.

Now that you have a real "proof product" and when you need more, you can contact the manufacturer and make additional changes....hence the Version 2. The above process may repeat or the manufacturer may actually get it right and you have a final version.

The complexities of the legal system between the United States and say China cannot be fathomed by less than 100 lawyers. If you think that your rights are the same or you have a contract and have some guarantee of some kind you are wrong. When things go wrong with an order, things will usually be made right but it will take forever or sometimes you will be stonewalled until you just back down. A great illustration of how these companies operate is by selling your own product to your competitors and other manufacturers. Let's say you have a $400 downpipe manufactured overseas for $80. The company that makes this will then add it to their catalog. This catalog gets sent to every one of their customers all day/every day and twice on sunday. The only thing that these folks do better than communication is marketing! Now everyone can buy your design. And often the manufacturer will re-spec it using cheaper materials and parts and knock off your original design (or better yet, knock off your knock off) and undersell you (or better yet, undersell the underseller). So when your manufacturer knocks you off, what are you going to do....sue your supplier??? They may also sell directly to the public or other companies using your company name in grand spam email fashion.....Cartboy, SuperchargerXS, Corn Tuning, Parrin may be famous on these websites.

[Unabomber]

One of the biggest draws to overseas purchasing or manufacturing is the cost. For example, most quality downpipes you see for Subarus can be had for under $100 each from the manufacturer. Yes, your $400 downpipe is that cheap....and by under $100 I mean WELL under $100 as well. Where the "gotcha" comes in is in the transportation issues. Like all most manufacturing activities your buying power is greater when dealing in larger numbers. So lets say you want 100 units manufactured. You will inevitably go over the magic limit for a single person import. You see, government regulations (ours not theirs) dictate that no person may import more than $2000 of merchandise at one time into the United States. So to legally import more than this you need a shipping agent. This person is responsible for the paperwork and arranging the shipping from overseas into the ports at Long Beach, CA.

Why Long Beach? Shipping via a ship is relatively inexpensive and is the #1 shipping method. The main con is the time. There are expedited shipment methods, but they are prohibitively expensive. The shipping agent is also another mouth to feed in the food chain and can help or hurt overall shipping as they are responsible to many customers and have to prioritize all their customer's orders into their allotted space on the ship. This agent represents another place where costs go up.

Another person that may or may not get added to the list of people with their hand out is a expediter. This person is the guy who can grease the skids of overseas paperwork and to a certain extent US paperwork as well. This is a nefarious and unofficial position but can really enable your shipment to get expedited. He will work with the company on getting the customs forms right so your import duty is much less. For example, one of the highest rates for import fees in the US is for finished stainless steel parts. If a container is labled as such, you will pay OMFGBBQ$$$ in fees. But if it is labeled scrap steel parts, the fees are much less. Semantics, but semantics that can save your wallet's ass.

Once your parts arrive in Long Beach, you have to contact a rail shipping company for bulk shipment to your warehouse. You see, UPS or FedEx won't pick up 3 cubic yards of boxes weighing 2000lbs. From the rail yard it gets picked up by a freight company to the warehouse, then gets shipped to the customer.

Now you can see how these fees eat up much of the apparent profit.

[Unabomber]

Now you know what happens in the world of parts from overseas. Much of the quality that comes from overseas comes from people lucky enough to find a company that produces quality the first time (rare), otherwise you have to deal with a company that has been doing this for awhile. By this, I mean that they have gone through 3-5 versions of their product before the factory has finally gotten it right. Once it is right, you run the risk of the manufacturing plant overseas rebranding your product (or your clone of another company's product) to another company or underselling it to a bigger fish who places a larger order.

So to those of you that think getting parts from overseas is easy. It is on the small scale, but the price point isn't terrific and you have a lengthy wait. And even on a large scale, the only thing that is great about it is the price point with the added headache of quality issues and shipping delays. The selling point of all of this is that most Subaru owners tend to be cheap people. Having been on this forum for years now, I have seen this problem from day one and it only gets worse with price of used Subarus coming into the range of sub 25 year olds. When you are young, you have less money and tend to pine about the price more than anything else. This fuels overseas manufacturing for vendors of parts. So a shift of thought process has to occur if there is to ever be a turn around.

I'll use a friend as an example. Kartboy makes all of his products here in the USA. The buck stops with him. Manage to break something of his? He'll replace it free, not so much to make you happy but to see what went wrong with the product to make the next generation happy. He's been on NASIOC since day 1 and only sells to super high quality vendors like Mach V, Turn in Concepts, Oakos, Rally Sport Direct, etc. Parts and Vendors....quality. If and when there is an issue, any person in the sales chain can and will fix the issue with zero BS. You can find near identical parts from other sources for less cost. But even a simple search will show that they are sold to any vendor with a check and have had numerous issues. This is just one example of many fine manufacturers and vendor networks, but one needs to realize that "Price, Quality, Service....pick two" is very true, and you need to decide if you are that type of person or the new "Value, Quality, Service" type of person. In my example above, I have a Kartboy shifter and I know that when nuclear war comes there will be cockroaches and my Kartboy shifter left over. Sure it's pricier than other versions, but the value factor is high as is the resale value if I were to ever sell it. Ooops! I wasn't supposed to say that was I? Imagine this: I can sell my quality product for 50-75% of it's retail price. How much do you think you can sell your Chinese eBay knock off part for???

And I would be sorely remiss if to not mention that not all knock off or overseas manufactured parts are terribly bad. One piece I know of is the knock off of the STI lip that many people use. I don't own a lip myself buy many trusted friends have told me the knock offs are actually better than the real deal STI lips. I guess the $Texas STI lips are made of some really hard plastic and tend to explode if you hit a parking stop. Bye-Bye $400 lip. The replicas are made of softer, more forgiving plastic so they wear better and are easier on the wallet.

So when it comes to parts, you should REALLY research the hell out of them. Visit our car parts review forum, research the manufacturer AND the Vendor. When in doubt, you are always best served by paying more from a 5 star vendor for a 5 star product. Realize that even spending $10 more on an identical part with a quality vendor is better in the long run. Support quality NASIOC vendors whose monthly fees allow you to research this stuff. If you find an unbelievable deal on something, there's two reasons why it's unbelievable: it's stolen or it's literally the cheapest and lowest quality part on the planet. And when it comes to eBay....just say no unless you know what you are doing. Yes, deals can be had there, but buying car parts on eBay is kind of like buying a salvage title car or rebuilding your own transmission....you know your can do it or you are in over your head.

I hope you enjoyed this article and appreciate it's intents which were to show you the behind the scenes of the parts world. I did not write this to bash US manufacturing or unions or make any sort of political or racial statements, it is just an article on the way it is. And believe it or not, MOST of the parts on your car come from overseas. That's not necessarily a bad thing, it's just that most people don't realize this. If you have any specific questions you'd like addressed, please send me a PM and I'll see if I can't find an answer and add it here.

[impreza_punk]

Subscribed.

[John Smith]

Subscribed.

[Chi_San]

Whoo, interesting. Can't wait for more!

[cessna152]

This should be interesting.

[jstalford]

Subscribed

[Spike700]

STICKY!!

[[email protected]]

Interesting reading so far Big Ron. We at Kartboy would like to point out that ALL our parts are manufactured in the USA. While we could farm our parts out like the thread above we do not. ALL our metal parts are Completed within a 10 mile radius of our shop. From purchasing the raw materials from local companies, to our plating company thats just down the street from our shop. The only thing we do not produce in house is our urethane parts. We have a company we've used since day one. (US company)

[kpluiten]

Originally Posted by [email protected]

Interesting reading so far Big Ron. We at Kartboy would like to point out that ALL our parts are manufactured in the USA. While we could farm our parts out like the thread above we do not. ALL our metal parts are Completed within a 10 mile radius of our shop. From purchasing the raw materials from local companies, to our plating company thats just down the street from our shop. The only thing we do not produce in house is our urethane parts. We have a company we've used since day one. (US company)

And this is why I buy your products. Buy USA!

[Miercoles Cansado]

This thread reminded me of this..........http://forums.nasioc.com/forums/show...ighlight=truth


And I don't buy Tom's parts because they're murican. I buy them because they are top notch.

[gopsu]

I agree- I buy Tom's parts because material quality is top notch & love $5 flat priority shipping cost.

[kpluiten]

Originally Posted by Miercoles Cansado

This thread reminded me of this..........http://forums.nasioc.com/forums/show...ighlight=truth


And I don't buy Tom's parts because they're murican. I buy them because they are top notch.

At this point I don't even care. I'm just ecstatic to find something made in the US anymore. It is a nice benefit that they happen to be awesome parts of great quality.

I worry about the future of manufacturing in this country.

[jdmimprez]

<<<<<<<< takes a seat on the NASIOC couch

[clbd39]

neat, i shall subscribe

[MY EJ20T]

good write up. just think WAL-MART when you read this article.

every item but the american flags at walmart are made in china...

opps. wait....news just in....whats this? american flags made in china?

WTF?!?!?!?!?!?!?!?!?!?!?!?!?!

why doesnt walmart sell chinese flags? I want one to hang over my

cherry when they come to this country

MY EJ20T

[John Smith]

http://peopleofwalmart.com/

[AtlxPat]

subie-scribed

[i_c_the_light]

I thought this was common knowledge. We did it in the timber industry. New customer, so for first 2-3 orders the product was top notch, yield was terrible and quality control was off the charts. Then we'd slowly start to slip our quality control slowly to the point where we have to raise it up again so nobody starts complaining and then start it over again with 2-3 orders of good ****.

[Howl]

It's not a suprise that a majority of parts come from overseas - it's classic free-market capitalism. Find the cheapest way to get the product to the consumer and you will maximize your profits.

The USA has been touting free market capitalism for the last 100 years or more because in a world where the most expensive component of manufacturing and distribution was transportation it made sense to have the manufacturing as close as possible to the natural resources required to make the product. That meant that the USA, which had an abundance of natural resources would be the biggest winner in a free-market world.

Today however there have been two major shifts in the world economy. Transportation is no longer the most expensive component of the manufacturing process and the USA's natural resources are no longer as abundant as they were. Therefore free market capitalists have said goodbye to US manufacturing and moved their factories to either the places with the lowest labour costs (which is probably the new the most expensive component of the manufacturing process) or to places closer to the new sources of natural resources.

If the USA wants to remain a player on the world economic stage it either needs to become competitive with other nations on labour costs or give up it's free market philosophy (which is now hurting the USA more than helping it) and look at protectionist measures to force corporations to keep active manufacturing plants in the USA.

[kevinh211]

so US company's are sending great products made in America to over seas companies to copy the product exactly? The first few batches look good and then they crack and break cause well you get what you pay for. this almost sounds like a gimmick!
get it? yeaa you do!

[FightingFalcon]

So...uhh...can someone tell me if my Scooby has Chinese-made parts in it or not?

[lev98]

Originally Posted by kpluiten

And this is why I buy your products. Buy USA!

All while you drive an import.