Saturday, September 13, 2008
The Fall of Great Eddy
About ten years ago, GReddy was an icon of the import performance world. I saw their logo everywhere - even people who didn't have GReddy parts on their car would put GReddy stickers on, hoping to impress people who didn't look under the hood. But I haven't seen their logo that much recently. Now I've found out that GReddy / Trust filed bankruptcy.
Some people have blamed cheap Chinese knock-offs for GReddy's decline. The knock-offs did steal the market for things like wastegates and blow-off valves, and some of Greddy's basic cast parts. And the market for performance parts has not been at its best in the past year with the economy going the way it is and the whole riceboy thing falling out of fashion. But I think there was more to GReddy's problems than that - GReddy's looked like a sitting target for quite a while, and it wasn't just the cheap knock-off sellers that took aim at them.
I've been active in the Miata parts market for a while, as the company I work for sells a plug and play ECU for Miatas. GReddy builds a turbo kit for Miatas, and I had the chance to see this kit more or less get shoved to the sidelines in the US market. This looks like it was something of a backwater for GReddy and they may have handled other particular projects better, but this may have a rather exaggerated demonstration of where GReddy went wrong.
GReddy jumped into the Miata turbo market early, with a basic, affordable kit for the '89-'93 Miatas with the 1.6. It was smog legal, but it was a pretty basic kit. No intercooler, and the only engine management was a rising rate fuel pressure regulator. Greddy also offered a piggyback engine controller called the eManage, in a couple different versions. The eManage Ultimate was a pretty advanced piggyback, able to control fuel and timing.
The trouble is, they stopped there. They didn't offer kits for the later 1.8, come out with a higher powered kit with an intercooler, or anything. When plug-in standalone engine management came out, GReddy ignored the Link, Hydra, and MSPNP systems and stayed with the eManage. Meanwhile, American companies like Flyin' Miata and BEGi started building kits that offered newer turbos, bolt on intercoolers, and many other advances over the GReddy kit, built these kits to fit the later Miatas, and backed them with better technical support too.
GReddy didn't take any steps to defend their position and stayed with offering the cheapest kit out there from a reputable manufacturer. They could have tried to take on the American tuners by expanding their range to fit the 1.8s, adding a kit at a higher price point that could compete on maximum horsepower, or otherwise try to hold onto the market. They just ignored Keith and Corky, possibly figuring that the higher price tag on the American kits meant that buyers didn't comparison shop between the two. This ensured they still had a niche in the Miata turbo market - until BEGi rolled out a stripped down kit within striking distance of GReddy's, and the option to later order more BEGi parts to upgrade it to the features on their more advanced kits. On the other hand, if you wanted to upgrade your GReddy kit, you bought the upgrade parts from BEGi or Flyin' Miata - or sometimes from the Chinese knock off sellers.
I can't say for certain if GReddy fought a better fight on other battlefields, but the Chinese knock-off industry and a sour economy aren't the only things to blame for this bankruptcy.
(It's worth noting that Greddy isn't actually gone at this point. Just in serious business trouble.)
Some people have blamed cheap Chinese knock-offs for GReddy's decline. The knock-offs did steal the market for things like wastegates and blow-off valves, and some of Greddy's basic cast parts. And the market for performance parts has not been at its best in the past year with the economy going the way it is and the whole riceboy thing falling out of fashion. But I think there was more to GReddy's problems than that - GReddy's looked like a sitting target for quite a while, and it wasn't just the cheap knock-off sellers that took aim at them.
I've been active in the Miata parts market for a while, as the company I work for sells a plug and play ECU for Miatas. GReddy builds a turbo kit for Miatas, and I had the chance to see this kit more or less get shoved to the sidelines in the US market. This looks like it was something of a backwater for GReddy and they may have handled other particular projects better, but this may have a rather exaggerated demonstration of where GReddy went wrong.
GReddy jumped into the Miata turbo market early, with a basic, affordable kit for the '89-'93 Miatas with the 1.6. It was smog legal, but it was a pretty basic kit. No intercooler, and the only engine management was a rising rate fuel pressure regulator. Greddy also offered a piggyback engine controller called the eManage, in a couple different versions. The eManage Ultimate was a pretty advanced piggyback, able to control fuel and timing.
The trouble is, they stopped there. They didn't offer kits for the later 1.8, come out with a higher powered kit with an intercooler, or anything. When plug-in standalone engine management came out, GReddy ignored the Link, Hydra, and MSPNP systems and stayed with the eManage. Meanwhile, American companies like Flyin' Miata and BEGi started building kits that offered newer turbos, bolt on intercoolers, and many other advances over the GReddy kit, built these kits to fit the later Miatas, and backed them with better technical support too.
GReddy didn't take any steps to defend their position and stayed with offering the cheapest kit out there from a reputable manufacturer. They could have tried to take on the American tuners by expanding their range to fit the 1.8s, adding a kit at a higher price point that could compete on maximum horsepower, or otherwise try to hold onto the market. They just ignored Keith and Corky, possibly figuring that the higher price tag on the American kits meant that buyers didn't comparison shop between the two. This ensured they still had a niche in the Miata turbo market - until BEGi rolled out a stripped down kit within striking distance of GReddy's, and the option to later order more BEGi parts to upgrade it to the features on their more advanced kits. On the other hand, if you wanted to upgrade your GReddy kit, you bought the upgrade parts from BEGi or Flyin' Miata - or sometimes from the Chinese knock off sellers.
I can't say for certain if GReddy fought a better fight on other battlefields, but the Chinese knock-off industry and a sour economy aren't the only things to blame for this bankruptcy.
(It's worth noting that Greddy isn't actually gone at this point. Just in serious business trouble.)
Labels: The Automotive Industry
