I'm sure Chinese producers also make a profit, however I'm not sure the disparity in the purchase price is due to differences in profit margins. In 2024 Akrapovic made 28 million on 200 million sales, which at 10% is regarded as good but way below what a drug cartel makes. The running costs of a business in the EU will be way more than in mainland China including (1,500) employees pay & benefits, power costs (Akrapovic have their own titanium foundry), building costs, material costs, investment, R & D costs etc etc. In fact, I suspect, everything to run a business would cost more. Slovenian 1 - "Hey Slovenian 2, why the long face?" Slovenian 2 - "Akra have closed down & I've lost my job" Slovenian 1 - "Never mind mate, btw can you give me a hand fitting this Chinese exhaust?"
No doubt the running costs are higher. So are the prices. The most expensive Chinese Titanium full system for a Monster was £700 The Akra system was £2849 There may well be some differences, lets suppose the Akra pipe is somehow in some way better? Now people can say whatever they like but the costs are not £2100 more in the EU, especially when claiming a 10% profit margin. Perhaps Mr Akra has spent the money buying himself a state of the art Titanium foundry from scratch, which is actually a tangible asset he can sell so arguably a future profit...
Long post warning. I work in purchasing for a large supplier to the US and UK military and Civil aviation industries, and work with Chinese suppliers every day, but not for anything that is for a Military end user. There are lots of reasons why it’s cheaper to buy from China, most of it is far too Complicated/Boring for me to be bothered to type it here. Their overheads are far cheaper: Rent or taxes on their own buildings are far lower. Labour rates are far lower, they often employ 2 or 3 people to do the same job as 1 person is expected to do here and it still costs them less. Whether you agree with paying employees so little is personal, but the cost of living there, and crucially the expectation of standard of living, is much smaller. Materials can be cheaper if the specification is loose enough to allow use of in-country manufactured materials. Not in our case I hasten to add. To complicate this some EU/US material manufacturers ship things like premium quality process controlled Plastic moulding powders to China in such large quantities that they can give bigger discounts to distributors there. Transport costs to the UK are compatible with buying from mainland Europe really, even for our costs of shipping parts by Air. It’s also often far quicker to work with them, which is key for lots of industries. We don’t work with just any supplier, they have to be fully approved to Aviation standards such as AS9100. For injection mouldings we struggle to find suppliers in the UK accredited to that standard, but in China we can find as many as we need. It’s the same with CNC machining suppliers. They are all audited, and inspected by US or European agencies to gain and maintain the accreditation, not local agencies. The group I work for also has people ‘in-country’ who visit all the suppliers regularly and also help with issue resolution when required. I am not happy about the situation, I would far rather work with UK suppliers, but in a larger business all purchasing departments are under a lot of pressure to reduce costs and lead times. We do have UK suppliers that are able to compete on both, but only because their owners or leaders have the right attitude, are right at the cutting edge of technology, and invest heavily to increase efficiencies. I will always use these businesses when I can, but have to prove to myself first that their business model and prices are sustainable for long term supply of the component. Unfortunately I talk to so many UK business owners who’s greed and attitude is the main reason for their inability to compete. When those Business owners turn up for a meeting in a brand new AMG Mercedes with a Rolex on the size of a curfew tag claiming they are struggling to invest or keep prices down I have no sympathy. Those that turn up in the works van, or mid range BMW/Audi have at least considered the image they portray and the conversation they need to have. I know of at least 2 business owners that hire a car to visit customers for that reason. A quick case study should demonstrate: We need @20pc production batch quantities of a new plastic injection moulding that also needs painting and possibly Logos for backlit buttons laser etched through the paint before over lacquering. Total quantity over 3-5yrs could be as low as 800pcs. The Material and Paint are tightly controlled and have to be ordered from a UK/US/EU source. This is heavily audited. Plus of course a tool needs to be designed, manufactured, and trials undertaken. Immediately there is a difference between AS9100 UK and China suppliers. The design engineer needs a Mold flow analysis to be carried out by the experts before finalising the CAD and Drawings. The guys in China will undertake this within 48hrs free of chance on the off chance of getting the work. The guys in the UK want a PO for @£250 before looking at it, and usually take 2 weeks to complete it. When the quotes for the tool and components come through they will look something like: UK Tool - £12,000, lead time 8-12 weeks including T1 off-tool samples. Then we’ll have to pay for any further trials unless it can be proven categorically that they did not follow instructions or data. Components parts - @£18ea to only be delivered in one batch of 800pcs. Paint and etching declined, so we’ll need to work separately with another supplier to get that done after they arrive. China Tool - $8,000, lead time 4-6 weeks including T1 off-tool samples. There is never any argument about who’s fault the first 2 changes are down to. Components parts - @$25ea, Fully painted and etched, delivered in batches to call off over the next 2yrs.
