AVID Technology have been trading overseas for more than a decade, MD Ryan Maughan speaks to BQ about the journey so far and what he hopes the future holds for the company.
What does your company do?
AVID Technology is an international leader in vehicle electrification and hybridisation. From our base in Cramlington, we design, manufacture and export electric motors and powertrain components for next generation hybrid and electric vehicles.
We have been advocating vehicle electrification to improve air quality and reduce climate change for 14 years and we are extremely proud to be helping some of the world’s largest vehicle manufacturers to design and deliver their electric and hybrid vehicles of the future using our products.
Our mission is to help save the planet one vehicle at a time. As a company we are dedicated to delivering our vision of a cleaner, greener future through the design and delivery of world-leading, energy efficient, electrified powertrain and propulsion technology.
When was your company launched, who by and why?
I founded the company in 2004 and began operating in 2005. Following a career travelling the world in motorsport engineering, I returned to the North East with an ambition to create a business dedicated to improving the efficiency and environmental impact of vehicles using systems electrification.
How long has the company been exporting?
What do you currently export, and where to?
AVID’s products are used in electric and hybrid vehicles from buses and trucks to supercars and off-highway machinery. We also provide engineering services to help our customers develop electrified vehicle powertrains. At present, we mainly export our products and services into mainland Europe, the US and Asia.
What motivated you to start selling overseas, and how long did it take?
I have always travelled a lot for business having spent my formative years in the motorsport industry so I have something of an international mindset.
There are more vehicle manufacturers outside the UK than inside it, so it was important to have international customers from the beginning.
What is the easiest part of exporting?
The easy part is the actual exporting of the physical part.
And the most challenging part?
Building relationships and developing new business opportunities with international customers, whilst navigating different cultural norms. For AVID, just 4 to 5 years ago we were creating a new market, trying to educate and help vehicle manufacturers to understand what they could do with electrification and why it was going to be so important to the future of their business. Sometimes this was a really hard sell. However, this has put the company in a great position today, now that the need for vehicle electrification in helping to tackle air quality and climate concerns are being recognised around the world.
Have language barriers, currency changes, etiquette and culture ever caused you any difficulties? How did you overcome them?
Language has never really been a problem, we are very lucky, especially in the automotive sector that English is widely used. I also try to learn the basics in local languages which goes down well, even if you get it completely wrong! People tend to appreciate the effort.
Over the past few years we have also been caught out by currency fluctuations because of the large swings against the Euro and USD, sometimes this works for us and sometimes against. Even if you always manage to sell in GBP (which is highly unlikely), for a business like ours, we have input costs in Euro and USD as well.
Did you get any support when you wanted to trade abroad? Who from, and was it helpful?
We have worked with the Department for International Trade over the years, they have had a great team locally, who were always supportive and kept us informed on available funding. We are also members of the North East Automotive Alliance which organises various trade expo events between members and they have also helped us to access support funding.
What advice would you give to someone just starting to explore overseas markets?
Think carefully about the product you are selling and how it will be received in the market you are targeting. If it is a product that the market is not used to, is it relevant to them and will they be willing to pay for it? What is the local competition like and are there any established business practices that might restrict your market access? Seek out advice from your trade association, such as the North East Automotive Alliance, who will be able to connect you with another member who is already active in that market. Spend some time thinking about how to access your customers. Be very cautious about signing on distributors and agents without fully researching them.
Where next? What markets are you looking into and where do you see the company in 5 years time?
It’s a great time to be doing what we do at AVID and the future looks very promising. We have a great customer base of leading vehicle manufacturers and they are all starting to bring vehicles and machines to the market using our products. This will see us significantly scale-up operations during 2019/20. We have also developed a potentially huge pipeline of new business, worth hundreds of millions of pounds, which should come on line in the next 2 to 3 years. Through this, we will increase our presence in the USA, investing in additional customer support, warehousing and final assembly. We are also developing a business plan for China because this is a huge market for our products that we need to build our presence in and hopefully the potential disruption of Brexit will be short lived!
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