Foreign Market Entry Strategy for Companies in European ATV Industry - Term Paper Example

Power Sports Industry has classified ATVs as one of the four main categories of sports purpose vehicles. According to Power Sports Industry Classifications the four sports purpose categories for the vehicles are: Statistics show that power-sports business was valued $18.5 billion in 2003, with an increase of approximately 2% from 2002 (Allbusiness 2006). Europe, in particular, is the most expectably prosperous market for power sports business. North America is still the major market of ATVs industry.

Although the product life cycle shows the market is getting matured. On the other hand, the European market still has potential. Due to this fact it is getting more importance. From the producer’s point of view, they (famous ATVs brands and suppliers) are shifting to Asian manufacturers. Japan is a traditional ATVs player (manufacturer) and recently manufacturers from Taiwan and China are squeezing the market and drive the reduction of the price (CENS 2005). After analyzing various factors CECTEK, a Taiwan based company has decided to join the competition in this industry.

The decision was based on the SWOT analysis of the company which included an analysis of advantages and opportunities existing in the European market for the player like this. CECTEK formed in 1995 is an enterprise of engine design and manufacturing. CECTEK is financially supported by government and Yulon Group (the biggest automobile manufacturer in Taiwan). CECTEK is representative of Taiwan, which has the ability to design, manufacture and innovate in its own automotive engine. Although CECTEK mainly sells the engine for an automobile, it has tried to put more emphasis on one cylinder engine for recreation and power-sports purposes that are ATVs engine.

(CECTEK 2006)