http://rpmware.com/industry-press-re...-end-of-an-era

<<We just got word that HKS is pulling out of the US market and transferring all operations back to their Japan headquarters. A letter from HKS cited several reasons for pulling out of the U.S including poor economic conditions, a shrinking aftermarket, and the disaster in Japan.>>

oh man...

 

I hope this doesn't lead to other companies doing the same. Although it would seem alot of this is going on due to online ordering.

 

ARC shut down this month too...

I know GReddy and APEXi went through Chapter 11 and came out on the other side... It's hard to compete with so many knock offs I guess.

-M

 

To tell you the truth....i'm no specialist on the subject. But it just seems like they are over-priced. And that the US has a little but more of a DIY type of attitude towards modification. Why pay 1500 for an exhaust or 800 for an exhaust manifold when you could have a custom exhaust system fabbed up for 500 in labor and spend another 5 for really good parts/metals/pipeing?

 

the strong yen is killing them by raising prices, but that doesn't mean they can't figure out a way to move some of their manufacturing out of Japan.



The way I read it, they are closing their US offices but still selling parts to distributors in the USA. So some people are getting laid off and their crappy customer service will just get worse.


I follow the industry closely. The Japanese Big Three performance parts makers (HKS, Apex'i, Greddy) will blame anybody and anything but themselves. The market for aftermarket parts could be better but the problem is that HK$ doesn't make anything that people want. All they sell are parts for 90s cars and slight redesigns of old stuff they have been selling for a decade. HK$ and its peers are getting killed by companies like Cobb Tuning, which have a much more modern business model. They sell parts for new cars (especially reflashing solutions for modern ECU's) and they do much of their marketing on internet forums.

What the heck does HK$ sell that sets them apart, besides maybe a Twin Power? I can get turbo stuff locally from a smaller US vendor like Aspec, Forced Performance, AMS, BNR, etc. Their engine management is mostly useless or hard to use on modern OBD II cars. Their boost controllers aren't any better than their competitors, and besides boost controllers are increasingly irrelevent on new cars because external controllers don't work with a modern ECU very well. Their exhaust systems and suspension is expensive but they can help shield themselves from currency problems if they found different suppliers.

Welcome to capitalism, gentlemen. Adapt or die.

 

HKS is a good company, and it is a shame to see them pull out.

Catering to a DIY attitude means catering to a lot of external liabilities. Everyone thinks they are god and can make anything. Whether they can do it or not, is a different story. You pay for the design, the shipping, the customs, and everything else in between.

In an age where emissions controls are becoming even stricter, companies like HKS have the clout to get CARB and Emissions approval paperwork for their products. A Joe Schmoe product does not. That itself is worth something as well.

The exchange rate and the dropping US-D is not helping the situation at all. What originally was intended to be a $800 dollar exhaust is now $1000 or $1100.

It's not a good situation either way, and I do not see the US recovering anytime soon.

 

Their competitors have figured out how to do it. Cobb Tuning has a big slice of the pie and they balance between DIY and dealer-run operations. Most R35 GT-R's run Cobb engine management (besides a few Haltechs out there). Cobb's stuff is big on Evo X's and most Subarus from the past decade. Now they are expanding into turbo BMW engines. That could have been HK$ in the same position, but they didn't develop what the market wanted.

Meh, you can still get away with stamping something "off-road only" in most cases

That is definitely a big problem, but offshore manufacturing and various financial hedging arrangements iare done all the time. They just decided that with their resources it wasn't worth it.

 

I will not comment on Cobb products (as I have no personal experience, but heard great things), but as I know it: The Cobb is a piggyback/reflash module and always will be. The HKS is a full engine management unit with much more capacity and virtually bulletproof, 2nd only to a Pectel or Motec. This is why the HKS V PRO is still a favorite among many of their customers and many will continue to swear by it. I am not an engine expert, or ECU expert either.

Stamping something off road use only will not save you from a fix it ticket or fine when a cop decides to inspect your "off-road" parts on a street driven car. This will be something that will eventually soon (and is as we speak) in all states, not just California. This the USA: A business backed with money always has more clout than 1 guy.

Japanese manufacturing is not the same as US manufacturing. The worker attitudes, and equipment are not the same. The Japanese would not trust other countries, and I have seen why. You could never convince Porsche, Ferrari or Lamborghini to manufacture their cars outside Germany or Italy. Same situation.

Also cars are much faster these days out of the box, and doing engine performance modifications is also more and more of a pain in the ***. People would rather focus on driving, wheels/tires, shocks, brakes. The stuff that actually helps a car go fast on a track.

 

Honda, Toyota and Nissan are built where? Those that want to stay in business will adapt. BMW has a plant in the US as well as many others, Ferrari and those have no need, they put out such a small amount and for a premium they only need one plant. Difference is a Ferrari is a Ferrari, an exhaust can be fabbed by anyone and do the exact same job much the same as many other parts.

Edit: and some Porsche were not built in Germany but Finland and still some parts are fabricated in other countries but assembled in Germany, but much like Ferrari they are a smaller company just not as small as the other 2.

 

my friend's reaction to the news:

"Dear HKS,

You will be missed for your undying support for the aftermarket community of cars that ceased production over a decade ago. Your Game Boy-inspired live data displays, your single-**** 3-digit-display advanced tuning hardware and your creation of the Supra owner we all know and love will be missed for years to come. Your turbochargers, with the soul of a Garrett, a platinum ball bearing and the stamp of HKS, have bled fear into the hearts of many. You will truly be missed for your dedication to customer support and your goal to always put the budget-minded consumer first. I can't believe you didnt sell, at the very least, more exhaust systems. Car enthusiasts just didn't understand these are custom tungsten 1-off engineered pieces. You brought a new meaning to the term 'you have to pay to play'. People just don't realize that your parts really ARE worth more than the value of their 90's vehicles. I have no doubt in my mind that your move to Japan will only improve both customer service and pricing, and I would like to personally thank you for once again putting the budget-minded consumer first.

Sincerely,

Tom Supranutswinger"

 

They have good product but IMO overprised.

 

Not surprising especially by the diminishing japanese tuning market. As an example I've noticed that for the last few months it has gotten quite hard to find tuning mags. In comparison to just a few years ago they were every where.

 

it's sad but when the US market is flooded with cheap knockoffs, bland new cars, and general preference toward drag and nascar, it's tough for brands that caters to such niche market like HKS to continue in an economic depression. I think they've been in the States for 30yrs? sad

 

NOOOOOOOO must buy twin power and Carbon TI stat!

 

I don't have hard numbers, but I can assure you it's not dead. It's just changed a lot. It's certainly not trendy anymore, and with credit cars being harder to get it is harder to [irresponsibly] finance builds. The 90s cars are in heavy decline. Subarus are huge now. Evos are also big but the production numbers aren't very big. 350Z and s2000 are getting cheap. Mazdaspeed 3 and direct injected engines in growing now. Direct injection is big frontier now, where the market hasn't settled yet.

There are only so many 240sx, FD, 3000GT, Supra, 300zx, etc cars around. And that's all HK$ really made parts for besides intake and exhaust.

Print media in general is dying. Everything has shifted to the internet. Forums are really big now and much of the advertising dollars are being spent on new formats such as vendor sponsorship. You also have a heavy emphasis on selling dyno sheets. Ever heard of dyno database online? They are getting big now as a marketing tool for vendors. They allow shops to upload dyno sheets and store them in a central location for customers to view.

 

i feel a lot of the market has turned to cheap Chinese Knock off parts. back in the early to mid 2000's everyone who was modding had either Greddy, HKS or Apexi parts, but with the advancement made my US companies such as AEM and so on and the flooding of Ebay parts people are going the cheaper route. its going so suck having to order and wait for parts to arrive from Japan now but at least one of the best tuning companies will still be around.

 

Well the other issue I see is that there are so much other choices available that are manufactured in the states, better alternative and half the cost that they have a though market.

 

To be honest the only HKS part that sells well is the twin power, at least for the rx7. Some of their exhaust stuff sells, but rarely. I'm not shocked they are leaving. I expect Apex will do the samething down the road. Greddy has been discontinuing a lot of their rx7 stuff also.

 

Many years ago when I had my first fd the hks hi power was only around $350 and the best flowing. Is that still true?

 

ding ding ding

 

No doubt the 'specialists' (COBB, AMS, Perrin) are beating the big houses likes GReddy, HKS and APEXi. Truth is, it's hard to be 'everything to everyone'.

Certain shops (Jason, Banzai, Pettit, etc) know RX-7s inside and out and are able to cater to a niche customer base and yes, sell some HKS parts to them. However, given the chance, they are going to manufacturer their own parts and push (sell) those over any other brand if it's fits/works for the specific customers build.

The reason? It's cheap and efficient. They own the cars, R&D is part of the day-to-day, the learning curve it much smaller AND they have the customer base.

To make parts, HKS has to purchase a Mazdaspeed 3 or GT-R or Evo X and get to work breaking it down, tooling up for production and testing out designs out all while maintain their standards.

Make no mistake, HKS isn't living off of RX-7s, Supras and 300ZXs... They are actively growing their make/model coverage, but the problem is, that isn't cheap.

Since the beginning of the year, HKS has released:

• HiPower Exhaust for Mazda 2
• Hipermax Coilovers for Lexus IS-F
• Legamax Exhaust for 2011 Scion tC
• ES Premium Exhaust for 2011 Subaru STI
• and even Coilovers and Intake for the new Toyota Prius

Not to mention the host of Evo X, GT-R, CR-Z and even BMW (!!!) parts that were debuted last year...

So not only are they manufacturing for every car under the sun, they are trying to offer a complete host of products for them. Intakes, Coilovers, Exhausts, Electronics, Turbo Kits, etc, etc, etc... Have you seen the HKS catalog recently? Faaaaawk.

Anyhow, truth is, HKS USA may be closing it's operations, but HKS Japan and it's products aren't going anywhere. There will be 3-4 big WDs in the US which will stock and order by the container from Japan. Forecasting will be important and if they're wrong, expect some stock delays on hot items.

-M

 

I think my post was too literal. Dead as in not the trend anymore, meaning its going back underground. Which in turn companies that cater to that particular market took a good hit.


My example was based on print media for the japanese market. I still enjoy reading about evos, scoobies, gtrs, 370z ect... So I look for those types od mags, except that they are getting hard to find. Which is a direct indication of whats happenning. Now muscle car type mags are in abundance as they can be found in every liquor store, 7-11, pharmacy, and grocery store that I go to. So their print media is alive and kicking.

 

Well here's a question: did you ever look at an HKS catalog about 8 years ago? It's the same stuff. The main things they've added in some catback exhausts and some coilovers for newer cars. They took their turbo kits and added ball bearing versions. It's the same ****. Why would I buy an expensive HKS rebadged Garrett turbo when I can get something from Forced Performance? Why get an HKS external wastegate when I can get a Tial, which is a high quality and less expensive part made in the USA? Sure some people like the brand name or the sound of their exhausts, but they really offer no unique products that are relevant to modern cars.

Their electronics gizzmos are increasingly dated and useless. Nobody uses turbo timers. External electronic boost controllers are mostly a 90s thing. Why would I buy a $600 HKS boost controller for my Evo when I can get a Cobb map that uses the factory boost controller effectively? I have tuned boost control on Subaru factory ECU using Cobb software. It's far more sophisticated than anything HK$ sells, and all that is built into the factory ECU. There are some people who like HKS F-Con V-pro for engine management, but honestly they are usually using it on 90s cars. I know only a little about V-pro because they require you to pay massive amounts of money to be a dealer in order to even touch their software.

The Twin Power is good for Rx-7's and basically old ignition systems. New cars have powerful coil-on-plug ignition systems as opposed to a wasted spark that the FD has. You can hook up an ignition amplifier box but most people don't. You just swap out the coils, usually to an OEM GM part. Why would I install an HK$ Twin Power when I can wire up some coils off a GM Truck? HK$ offers an ignition amplifier for Rx-8's but everybody swaps in GM coils from a kit sold by an rx8club vendor.

 

I'm not looking to argue anything... but if you're point is, HKS has been trying to sell the same stuff for the better part of the past decade - you're wrong. The HKS catalog has changed dramatically in eight years.

• Multiple iterations of all their electronics - Turbo Timers have been redesigned at least 5 times, EVC is on it's 6th iteration adding new features every time, the F-CON and CAMP system have been overhauled and their gauges are redesigned roughly every two years.
• At least a half dozen new versions / types of coilovers ranging from redesigns of the flagship Hipermax's to luxury options for BMW and Lexus.
• At least a half dozen new exhaust options incorporating trends like Carbon Fiber & Titanium and quieter versions for customers that need dB limits.
• They've redesigned their SSQV BOV three times, maintaining the quality which improving the looks (subjective) and making it more compact.
• They've continued to expand their Cam line adding multiple durations / lifts depending on the engine builders needs.
• Their turbo kits have evolved to offer tubular and cast manifolds with, yes, ball bearing options and their wastegates have been redesigned into more compact versions as well.

Now if you're saying their parts for the RX-7 specifically have been stale. Ok, I'll agree with you there, they haven't invested in making the best turbo kit on the market specifically for the RX-7 in the past 8 years, but obviously they've had other priorities.


-M

 

HKS will continue to operate outside of the U.S. just like the memo says. While there are a number of things to point out, it really comes down to the fundamentals - sales are very sluggish in the U.S. The reality is no one purchased their products. Looking at their 2010 Year End Gross Profit figures you saw a 21.5% decline over 2009 (they are a public company in Japan). When was the last time you purchase a brand new HKS product? ...Sure you might have contributed to their recent sales, but they have to continue selling. How many people continue to replace/upgrade their exhaust in a 5 year period? My gut tells me very few. Plus I see more people trying to get second hand products because of how affordable they are. As it was mentioned before people find it very difficult to spend $1100 on an exhaust system.

By the way ARC International didn’t just close down, they went bankrupt.

On the comment about the weakening U.S. dollar; thank the government’s QE2 and low interest rates for that. The U.S. dollar is weaker but it makes our exports more attractive which helps boost the U.S. economy and creates inflation. Otherwise we could face a deflationary period and slump back into a recession. The strong yen is not the sole issue that is killing HKS. Commodity input prices and futures are what’s hurting manufacturing companies. This can be attributed to poor hedging and planning from their financial department. An example is the nickel alloy used in turbocharges.

Finally I don’t know how people are calling the shots on who owns what percentage of the tuning market. I have not seen any publications, purchased or free, that outlines by Sales/Revenues what each tuning company is doing. So for someone to say the Cobb owning more market share than HKS is something that needs to be proven with supplemental data.

Something I keep in the back of my mind is the Japanese are very brand obsessed. When they buy a brand they are sending a message to onlookers; they're spending top dollar for what they believe is quality. I believe this is the business model HKS has used, which (IMO) does not translate well in the U.S. market.

On a side note everyone’s favorite Japanese motoring shows, Hot Version and Best Motoring, are officially cancelled siting weak economic conditions and lagging sales.