Industry: Consumer & Lifestyle
Products: Performance/racing driveline parts
Drag racer-turned-entrepreneur Paul Lee revitalized the company by tapping into the growing global automotive racing and aftermarket industries.
Within the automotive aftermarket, McLeod Racing has been providing high-performance driveline components for racing and street use since 1971. Lee bought the company from its founder, legendary clutch designer Red Roberts, in 2008.
As a professional drag racer with advanced degrees in business and law, Lee thought he could move the company forward, utilizing his background in finance and management. "We changed a lot," says Lee. "We began to concentrate more on customer service, branding, and marketing. Customer service here was always pretty good, but the marketing and branding was the company's weakness. We took it all to the next level when we took over the company."
In September 2017, McLeod Racing moved to a new 25,000-square-foot facility in Anaheim. Lee says the company can design and assemble all of the company's products with parts sourced from around the U.S. at the new facility.
While McLeod Racing's products are popular around the world, Lee says that the Middle East has become a significant market with a growing culture of performance cars and hot-rodding. Capitalizing on this and other regional trends, the company now offers different products and marketing efforts keyed to specific regions of the globe.
"The traditional hot-rodder who likes to drive a stick shift, as opposed to an automatic transmission, is still our primary customer," says Lee. "Those are the people who look at shifting cars themselves as a fun part of hot-rodding, and we want to keep that alive in the U.S. and abroad." According to Lee, about 95 percent of McLeod's products are sold for street use, with the remainder used in various professional racing applications, including Top Fuel Funny Cars.
Lee is now using various methods of distribution to move the company's products out to dealers and consumers. "We have a three-step distribution," says Lee. "We're the manufacturer and we support our dealers. Ninety-nine percent of sales go through our dealers. We do, however, have online sales. Those customers are mostly overseas orders and we never compete with our dealers on pricing."
Within an expanding global market, Lee strives to maintain McLeod Racing's reputation for building a superior performance product and good customer service. "We make a higher-end and higher-quality product, not necessarily the cheapest," he explains. "In the performance community, people want to buy the best and they come to us. Price is not the leading factor for our customers."
The company offers full technical support through its website. Lee also is adamant that his staff be available to customers by telephone to answer any questions.
According to the Specialty Equipment Market Association (SEMA), the automotive aftermarket/racing industry is worth an approximately $45 billion annually and continues to grow globally. Lee has tapped into that growth and the company has a steady demand for their products year-round.
Challenges: "The traditional manual-shift driveline is going away," says Lee. "After 2018, you won't be able to find a traditional clutch in an American car. In addition, everything in high performance is going toward dual-clutch technology, and we've had to work on that to stay ahead of our competitors. There will still be millions of cars out there that will need traditional clutches in the future, so that market won't completely go away, but it won't be a growing one here in the U.S."
Opportunities: The shift to new technologies also represents an opportunity for McLeod Racing. Lee says that the company will continue to feel the pulse of the market, and develop new products to meet future needs for its street performance and racing customers.
Needs: Lee says that the company needs to continue to find and drive global expansion into new markets, as well as meeting the present and future demand for new products in the U.S.