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10 major licensing deals in Japan, China, Korea and Taiwan

Client
Client:VNC Automotive
Product
Product:Car infotainment & connectivity systems
Markets
Markets:China, Japan, Korea, Taiwan
Targets
Targets:Asia's leading car OEMs/tiers
Results
Results:Multi-million $ licence deals

VNC Automotive is one of our longest-standing clients: we’ve been helping the company license its connectivity software to Asia’s top automotive OEMs and tier one infotainment head unit manufacturers since 2012.

While many clients would have ‘graduated’ from our Surrogate Sales Program after 12-36 months, VNC has kept us on board for so long because the sales have kept flying in.

First commercial presence in Asia

Rewind to 2012:  VNC originally appointed us to act as an extension of its international sales team and provide the company with its first commercial presence in Asia. Our job was to present their technology to decision makers across Asia’s automotive sector, generating interest and seeking licensing deals for their smartphone virtualisation technology, competing against big-name products like Android Auto and Apple CarPlay.

We know the best way to understand the ‘real’ opportunity and quickly progress towards deals is through face-to-face discussions. So, we tapped into our network of senior automotive execs to get initial buy-in and understand their product roadmaps.

At the same time, we weren’t afraid to get our hands dirty with the more mundane tasks: a day in the life of our project teams included wheeling around VNC’s demo kit to present their technology to rooms of engineers – an equally vital part of the sales cycle.

The payoff

Of course, major licensing deals don’t come easily. In total, we’ve met 1,970 contacts from 570 companies across Asia’s leading automotive players on VNC’s behalf.

But the hard work has paid off. We’ve closed licensing deals for VNC with more than 10 Asian corporations including heavy hitters Sony, HTC, Panasonic, Mitsubishi Electric, Pioneer and Humax - for use in cars from Toyota, SAIC and Chunghwa Motors, among others.

And our story with VNC is now finally concluding, as the company is moving on from our sales programme to set up its own Asian operations.

To ensure a smooth transition, we’re helping them develop and implement a robust localisation strategy by managing headhunters, screening and interviewing candidates and hiring staff in Asia on their behalf.

We can look back on our long relationship with VNC with considerable pride – and look forward to seeing the company continue its rapid growth in Asia on its own feet from now.

Teconnex: a JV to crack the Chinese market

Teconnex came to us to make more headway in selling its customised, heavy-duty steel clamping products to automotive and off-highway OEMs and tier-1s in China.

Before this, the firm could only secure several one-off orders with Chinese branches of its global customers. They’d also visited several Chinese automotive events, meeting dozens of companies who’d said they “were interested in learning more.”

Challenges

But Teconnex was unable to fully grasp the key players and extent of opportunities in China. And there were other significant challenges including culture, time zone and language.

So the company appointed us to analyse the true potential of the market and advise on what it would take to sell its products on a more comprehensive basis in the country.

We spent the first three months engaging decision makers at 48 of Teconnex’s potential customers. Through this process, we uncovered the potential for $20 million of Chinese sales. But we also learnt that, to be considered a suitable supplier by these prospective customers, Teconnex would need to localise its manufacturing. 

Joint venture

Given the scale of the opportunity, Teconnex agreed they were open to localising production, so we conducted a ‘deep dive’ into various options – from a joint venture to a WFOE (wholly foreign owned enterprise) and competitor acquisition – analysing the benefits, risks and challenges of each.

We concluded a JV would be the best way forward, and benchmarked several partner candidates. We recommended Funwick Group, based in Kunshan in the suburbs of Shanghai, and led the negotiations with the Chinese company. [get photo of signing ceremony??]

Once the JV was official, we helped to screen and hire a General Manager and leadership team for the new enterprise. We also attend its board meetings as an advisor to Teconnex.

Long-term sales

In parallel to the JV negotiations, we secured several long-term orders for the company on the promise that manufacturing would take place in China.

And to-date, we’ve won more than $20 million in sales from companies including Mitsubishi, Faurecia, Cummins, BorgWarner, Bosch-Mahle, Tenneco and Agco.

While some home-grown Chinese brands such as Vofon Turbochargers and Wuxi Weifu are amongst these new customers, many of the largest are the Chinese or APAC HQs of multinational corporations. Dealing with such multinationals has had a unique set of challenges, and there have always been tough negotiations around local pricing - even where global pricing agreements were already in place!  But significant orders have almost always resulted.

Japanese market

More recently, we’ve been appointed to run a similar sales programme for Teconnex in Japan.

As a result, Teconnex has made considerable headway in Japan and is today serving corporations including Toyota Tsusho, Kawasaki, IHI, Komatsu, Kubota, and Sango -- in many cases supplying directly from its Chinese production facilities in Kunshan.

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