Satellite navigation and in-car DVD company Tier One Electronics has set up procurement agreements with factories in China and Taiwan, in a bid to get products to market faster and bolster its range.
Tier One, which bought itself out from the listed Mustek group a year ago, has signed an agreement with a Chinese-based procurement company, which will lead to direct relationships with more than 10 factories in China and Taiwan within the next year, to source products that will complement its current range.
The company distributes mobile video and multimedia solutions to the South African motor industry. This includes portable and custom-made DVD and navigation systems for several original equipment manufacturers such as Jaguar, Land Rover, Hyundai, KIA, Mahindra and Toyota.
Tier One Electronics was founded in May 2001 as a computer distributor. Its core business changed to mobile video with the introduction of the Video Traveller in October 2001. It is the local distributor for US-based Audiovox.
MD Stephen Easton explains the company has since narrowed its range and is now focused on supplying the latest technology for in-car entertainment. “Since we bought ourselves out from Mustek, we have actively been refocusing on our core competencies and core product range,” he says.
Quality issues
Tier One had always considered buying from China, but there had been issues in product consistency, says Easton. However, the company decided it needed to import its own products to be first to market.
Easton explains Tier One conducted an evaluation, which included quality and consistency of products manufactured in China. It also looked at whether the factories were complaint with ISO standards. After that, it interrogated the quality of manufactured items on a component basis, he adds.
“Our procurement company, which is also used by Mustek, will ensure that all factories selected are strictly following ISO 9000 standards.”
Tier One will import products from China and Taiwan, which will be branded with its own in-house product ranges, says Easton. He explains the company does not have the capacity to manufacture units in SA.
Currently, Tier One mostly brings in multimedia products that are targeted at original equipment manufacturers, says Easton. However, it will soon expand its range and add new products to its line in the next year, he adds.
Tier One has relocated its head office and distribution centre to Durban, and is in the process of setting up sales offices in Gauteng and Bloemfontein. It already has representation in the Cape region through a sub-distributor.
In the next two to three years, Easton expects Internet-capable devices to start taking off. He explains the company already has products that can hook up to data networks in its range, but the demand is currently limited.
However, Easton sees a potential market for 3G-enabled devices in the freight industry, which will replace notebooks and allow delivery staff to scan documents and submit them over the Internet.
Tier One is still the exclusive distributor for US-based Audiovox, Boss Audio and Rosen Entertainment. It will also provide the N-Drive navigational software solution after signing an agreement with TeleAtlas Netherlands to use its data on Tier One's systems.
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