China wants to Make our products? Trouble understanding the Motive.
China wants to Make our products? Trouble understanding the Motive.
(OP)
I work for a small company (approx 20 employees) manufacturing unique recreational vehicles.
Recently we've had multiple Chinese companies/individuals purchase our products. They all want to be dealers, by where they buy a certain amount of products & receive a pre-neg discount which will allow them to resell at a higher cost for make profit. Some have been given dealership agreements.
We thought they were probably going to counterfeit. Being a small company, there is not much we can do stop counterfeiters in other countries despite what some may say or think. It would not be the first time we have been counterfeited. So we decided to sell them to get some money out of it regardless of what happened.
Most of the Chinese companies/individuals are re-selling them to various branches/outlets of the the Chinese government. It seems that they offer "under the table" bribes/kick-backs" to the officer/manager of the given government branch that it interested in buying the product. And which ever dealer offers the most rewarding kick-back will often get the sale even though they may be selling the product at the highest price (obviously the kick-back just gets tagged on to the end-price of the product).... Anyway.....
Each of these companies/individuals are currently manufacturing and/or selling other quasi-similar products, as the sale qty from our products alone are too small to support a decent sized business.
However, to our knowledge they have not copied or counterfeited the products. We've went to China and visited their factories & businesses.etc They have our products and are capable of reverse engineering, copying and manufacturing them. However, they seem bent on setting up some type of deal where we "endorse" them to manufacture our these products in China for sale in China. This involves us giving drawings & technical support.etc However our product is not all that complex (probably about as complex as your average motorcycle) so it is not as if they cannot reverse engineer it themselves.
They are willing to export I think but seem to be interested in Mfg for sale in China. They don't seem too interested in manufacturing specific components and exporting to us. They tend to want to manufacture the whole/final product.
I was wondering if anyone had any experience with business in China. Is the government offering a reward or subsidy for bringing outside/foreign & "endorsed" manufacturing into China?
Something worth noting; We do not offer protection to the dealers, thus 2 or more dealers may open in the same area/country and compete with each other as is the case here. Perhaps if a dealer can become a manufacturer of the product they will win the monopoly of selling our product?
Recently we've had multiple Chinese companies/individuals purchase our products. They all want to be dealers, by where they buy a certain amount of products & receive a pre-neg discount which will allow them to resell at a higher cost for make profit. Some have been given dealership agreements.
We thought they were probably going to counterfeit. Being a small company, there is not much we can do stop counterfeiters in other countries despite what some may say or think. It would not be the first time we have been counterfeited. So we decided to sell them to get some money out of it regardless of what happened.
Most of the Chinese companies/individuals are re-selling them to various branches/outlets of the the Chinese government. It seems that they offer "under the table" bribes/kick-backs" to the officer/manager of the given government branch that it interested in buying the product. And which ever dealer offers the most rewarding kick-back will often get the sale even though they may be selling the product at the highest price (obviously the kick-back just gets tagged on to the end-price of the product).... Anyway.....
Each of these companies/individuals are currently manufacturing and/or selling other quasi-similar products, as the sale qty from our products alone are too small to support a decent sized business.
However, to our knowledge they have not copied or counterfeited the products. We've went to China and visited their factories & businesses.etc They have our products and are capable of reverse engineering, copying and manufacturing them. However, they seem bent on setting up some type of deal where we "endorse" them to manufacture our these products in China for sale in China. This involves us giving drawings & technical support.etc However our product is not all that complex (probably about as complex as your average motorcycle) so it is not as if they cannot reverse engineer it themselves.
They are willing to export I think but seem to be interested in Mfg for sale in China. They don't seem too interested in manufacturing specific components and exporting to us. They tend to want to manufacture the whole/final product.
I was wondering if anyone had any experience with business in China. Is the government offering a reward or subsidy for bringing outside/foreign & "endorsed" manufacturing into China?
Something worth noting; We do not offer protection to the dealers, thus 2 or more dealers may open in the same area/country and compete with each other as is the case here. Perhaps if a dealer can become a manufacturer of the product they will win the monopoly of selling our product?





RE: China wants to Make our products? Trouble understanding the Motive.
We were convinced to sell 100 'kits' to produce one of our smaller products, not quite as complex as a motorcycle, but close, for final assembly and sale in China.
We tooled up to produce more kits, meaning we sold the kits at a loss, in anticipation of future sales.
We shipped the kits, and never heard from the buyer again.
At that time, I suspected that the kits were used as prototypes to clone the product, but I have no knowledge that such a thing did or did not happen.
Upon reflection, it was kind of a crappy product because it was rushed to market, so it wouldn't surprise me to find a vastly improved Chinese version for sale somewhere. ... but I have no knowledge that such a thing did or did not happen.
Your mileage may vary.
ISTR that both Buick and Harley-Davidson have been selling their products in China profitably for some time, and Chinese clones may exist, but have not appeared here. ... yet. ... probably because the Chinese domestic market is so huge that it's not worth the bother to ship clones into a smaller and competitive market.
I'd be concerned about selling my drawings overseas, especially if the customer requested a modification to add tiedowns for ocean shipping. That could backfire badly.
Be sure the sale price for the drawings is sufficient to fully fund the owner's retirement.
Mike Halloran
Pembroke Pines, FL, USA
RE: China wants to Make our products? Trouble understanding the Motive.
TTFN

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RE: China wants to Make our products? Trouble understanding the Motive.
Dan - Owner
http://www.Hi-TecDesigns.com
RE: China wants to Make our products? Trouble understanding the Motive.
RE: China wants to Make our products? Trouble understanding the Motive.
My opinion? They are copying your design.
RE: China wants to Make our products? Trouble understanding the Motive.
How does the company owner answer your Eng-Tips question?
RE: China wants to Make our products? Trouble understanding the Motive.
TTFN

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RE: China wants to Make our products? Trouble understanding the Motive.
The mind boggles...
Sam
Brisbane, Australia
Young Engineer. American old west enthusiast
RE: China wants to Make our products? Trouble understanding the Motive.
PE, SE
Eastern United States
"If a builder builds a house for someone, and does not construct it properly, and the house which he built falls in and kills its owner, then that builder shall be put to death!"
~Code of Hammurabi
RE: China wants to Make our products? Trouble understanding the Motive.
That would make me worry - is there some way the dongles could be hacked to retransmit your supposedly encrypted data stream, or...?
RE: China wants to Make our products? Trouble understanding the Motive.
Dan - Owner
http://www.Hi-TecDesigns.com
RE: China wants to Make our products? Trouble understanding the Motive.
We make or modify virtually every part. We do not manufacture engines, but rather buy them from a well known engine supplier and modify them for our use.
Materials, Fabrication & Modification are the real money-sponges... Its not worth the time & effort to send all the parts to China just to have them to assemble them. The money saver is in manufacturing some or all of the components in China.
Think of your average motorcycle... What is Super-Secret about an avg motorcycle? Nothing... Exclude the engine and every part could be reverse engineered or purchased elsewhere with relative ease.
The best case would be to let them manufacture some of the components for us, but they are bent on manufacturing & assembling the whole product... I'm reading between the lines here, but it seems they aren't interested in offering us Money for our designs & endorsement to mfg, but rather offer us "stock" in their company and/or cheap products for us to resell. Kind of the ole switch-a-roo if I'm reading the situation right.