Personal Attention Helps Custom Wheel Firm Roll Into New Markets

A decade ago, Anthony Munoz was hired to set up an export division for American Racing Custom Wheels, based in Rancho Dominguez. Munoz speaks Spanish, so his boss suggested he might start by exporting the company’s customized auto wheels to Latin America.

But Munoz ignored that suggestion and took aim at a bigger market: Europe. He was attracted to Europe’s strong economy, its political stability and Europeans’ love affair with their automobiles. And because of Europe’s compact size, he figured he could visit many countries in one trip.

A decade later, Munoz and his staff of five have generated $55 million in total export sales of chromium car wheels to 71 countries, from Britain to Japan.

“We make a product that nobody needs,” Munoz said of the spiffy aftermarket wheels. “Every vehicle that’s manufactured comes out of the factory with wheels, or else it can’t even move. We come along and say, ‘Take those off. Our wheels will make your vehicle more attractive.’ ”

How Munoz succeeded overseas offers some insights for companies that want to tap into new markets.

Rather than set up his own sales staff in each foreign country, Munoz decided he’d be better off selling through experienced distributors in foreign countries who in turn would sell to retail stores.

*

His first problem was finding the right distributors. So Munoz’s first “foreign” trip was to the Akron, Ohio, headquarters of Goodyear, Firestone and General Tire. Munoz told the tire makers that their overseas distributors would find American Racing’s “Made in the U.S.A.” wheels a strong, complementary product to their American tire brands. He also observed that every consumer in the world wants to buy a product made somewhere else.

The tire makers agreed with Munoz and gave him a green light to call their overseas distributors.

His first of many two-week trips took him to Belgium, the Netherlands, Germany, Britain and Spain, where each distributor he met with spoke English. Munoz gave them all the same sales pitch: that a large part of Levi Strauss’ success was due to its being an American icon.

“People will stand in line from Moscow to Beijing to buy Levi’s blue jeans,” he said. “Any tailor in any alley could make the same product cheaper, maybe even better, [but] it doesn’t have the Levi name on it.”

American Racing could be a hot U.S. product like Levi’s, he told the distributors, and he emphasized the mystique of American car culture. “We are the same as blue jeans,” he said, “except that our product is made out of steel instead of denim.” (A set of American Racing’s wheels sell at retail for $500 and up.)

Munoz also presented these European distributors with a three-minute videotape of American Racing’s facilities and with catalogs showing the company’s many styles of “mag” wheels.

*

The most important thing he presented, though, was his own presence. “I was more important than the videos and the catalogs, [which] I could have mailed to 100 different companies and would have been meaningless. The distributors want to know who they’re dealing with,” Munoz said.

Conducting business in person was the only way to truly reach them, Munoz said. Some distributors wouldn’t agree to sell his product until they’d toured American Racing’s facilities.

By the end of the first year, he’d signed contracts with 10 distributors and the company had booked $1.2 million in export sales. One tactic Munoz has utilized is to sign up only one distributor per country so that distributors won’t undercut each other on price and damage American Racing’s product value.

The road to success overseas wasn’t without bumps. The Japanese market proved especially difficult. It was four years before American Racing’s wheels began to sell well in Japan.

His production team had to create new molds just to make a line of wheels solely for Japan--because standard-sized American wheels don’t fit Japanese vehicles--and devised 200 new parts just for the Japanese market. American Racing also had to create a new product line to supply the Russian jeep market.

Another lesson Munoz learned is that it’s very important to Japanese consumers that the packaging be perfect.

The first containers American Racing shipped to Japan were plain white cardboard boxes, with small type. Humidity during overseas shipping sometimes softened the paper boxes so that the wheels occasionally left an impression. The prospective Japanese customer found that distasteful. Furthermore, the boxes had unattractive industrial staples, and consumers were concerned that a beautiful chrome wheel could be scratched by a staple.

So Munoz had American Racing change its packaging. The new boxes were sturdier and held together by glue, not staples. They also were glossy and featured a bold American flag and sporty lettering.

Today Japan is American Racing’s biggest overseas market. Even sales reps at Honda and Toyota dealerships in Japan are selling American Racing wheels.

Any new-to-export company should plan to spend the first year identifying key markets and distribution systems and establishing them, Munoz said. They should expect to spend the second year getting the product known in those new markets. By the end of the third year, overseas business could be blossoming.

*

Munoz also advises any new exporter to establish a budget big enough to cover the travel costs necessary to develop strong overseas relationships. “You can’t develop a relationship over a fax machine,” he said.

Andrew Manson, a distributor for American Racing in Australia, confirmed the attention Munoz gives to his overseas business associates.

“If you ask Tony when my daughter’s birthday is, he’d probably know it, and she’s only 1 year old,” Manson said from his office in Bayswater, Australia. “Once we got a few dozen wheels boxed wrong and Tony replaced them for us straightaway, no expense, no nothing. That’s customer service.”

To bolster its marketing strength overseas, American Racing in 1996 obtained certification from the international regime for standardization of process and quality control, or ISO 9000. It’s the equivalent of a thumbs up from Consumer Reports and is a sign of excellence in European and Asian markets.

Munoz keeps looking to add new overseas customers. American Racing even sells wheels in Iceland: “Iceland is a small country, with 275,000 people,” he noted, “but almost every vehicle they have . . . is a 4-by-4 sport-utility or pickup truck or a minivan, and those are our three major vehicle applications.”

The Times is interested in hearing about your experiences as a business traveler and as someone doing business in the international marketplace. Please write to global.savvy@latimes.com.