AMS Group recognizes that non-US OEM’s must integrate new product sales with after-market support solutions in order to demonstrate their commitment to the development of the US market. To service those needs, AMS Group has developed a number of successful joint ventures. Typically a bespoke entity is established in the USA with the express purpose of resolving the OEM’s position as an overseas supplier of new equipment or technology. In addition to the many practical benefits of offering a local presence, the formation of a dedicated and focused US company can send a powerful message to the customer, affirming the OEM’s long-term commitment to the United States.
The United States has a clear preference for buying from and dealing with domestic suppliers, and as such overseas OEM’s are well advised to consider the establishment of a US-based entity when considering how to develop the US market for new products and/or technology. Furthermore, AMS Group holds to the belief that domestic through-life support is essential to the marketing of foreign manufactured equipment. This local support can be achieved in a number of ways; by the appointment of independent distributors, the establishment of wholly owned subsidiary or through the formation of a joint venture.
Working through an independent entity, i.e. a distributor or a representative, may be the simplest method for accessing the USA market, providing a great deal of flexibility. However, it also has three inherent disadvantages:
- The arrangement is temporary – either party can terminate the arrangement at will
- The control of the route to market is limited and inflexible - it is governed by the agreement between the parties
- The company does not participate in the US revenues – the US company keeps the US income
While the formation of a wholly owned subsidiary addresses these issues, it presents a different set of difficulties; it is expensive, it is difficult to do, and it takes time. Therefore, AMS Group proposes a third approach which may be the most viable way forward for many companies, the establishment of a joint venture (JV) with AMS Group as the local partner. This approach addresses all of the concerns identified above and provides additional benefits. Specifically, the overseas company can be the majority stockholder with control over the operation and direction of the JV company and:
- Enjoy the "Lion’s Share" of US revenues – rather than allowing them to go to a third party,
- Avoid the high cost and high risk of establishing the required infrastructure,
- The JV can be established in the minimum amount of time as many of the required assets are already in place at AMS Group and
- The US-based JV is a permanent entity, which can continue ad infinitum or be terminated at the will of the majority
Why AMS Group?
AMS Group provides a proven partnership for the establishment of US based JV companies, offering a comprehensive range of market development, local management of business development, repair and overhaul and/or manufacturing facilities and all required back office support services. Our experience is demonstrated through a number of successful case histories with our JV partners.
Successful JV Models
AMS Group has proven the model through participation in several JV companies with major European OEM’s. These AMS Group JV entities provide a broad range of services and capabilities, including; domestic manufacturing, sales and marketing, system integration and logistic support of in-service equipment with US DOD and other customers. The AMS Group JV entities employ qualified US personnel, permitting direct and unrestricted access to US programs, with the support of US “stakeholders”.