Launch Tech tools diagnose 4-wheeled patients' woes

Updated: 2012-06-01 10:52

By Wang Jun in Los Angeles (China Daily)

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Launch Tech tools diagnose 4-wheeled patients' woes

Jeffrey Qu (center), CEO and president of Launch Tech USA, and VP of Diagnostics Harlan Siegel (left) accept the Motor Top 20 Tool Award from Motor Magazine's Dave Marlowe (right) in November 2011. Provided to China Daily

Jeffrey Qu is excited about traveling next week to China, the latest of his regular trips there during the past decade.

This time, the CEO of the US subsidiary of Launch Tech Co Ltd is flying to Shenzhen to celebrate the 20th anniversary of the company's founding.

Launch Tech, which makes equipment for diagnosing and testing automobiles, will use its birthday party to unveil a new product - Diagnosis Based Solution for Car, or DBSCar. Its internal semiconductor, designed in China, sends signals from a car to the "cloud", or virtual information storage for computers. The data is accessible by authorized end-users such as insurance companies, auto mechanics and fleet managers.

Victor Rivilla, marketing director of Launch Tech USA, said the Ontario, California company and its Shenzhen-based parent are the first to use cloud-computing technology in auto-servicing scan tools.

"Drivers can share information about their cars with each other through this way too," he said.

The DBS chip isn't Launch Tech's first foray into the retail market. Experience with other products aimed at do-it-yourself mechanics has shown the company how important it is that such tools be easy to use.

Toward that goal, Launch Tech offers a version of its MD4My-Car product as a free application through Apple Inc's iTunes online marketplace. Users can download the app to their iPads or iPhones and configure it with their cars' onboard computers to obtain realtime readouts on engine performance, problem monitoring and driving data.

Offline, Launch Tech USA is in talks with Wal-Mart Stores Inc to put its primary DIY product, Pocket Tech, on the shelves of the world's biggest retailer. It's already carried by major auto parts stores in the US.

"Pocket Tech would arm individuals with vital information about their vehicle's condition prior to visiting a repair shop," Rivilla said. "We're indeed creating a need in the market."

The device is hooked up to a vehicle after a dashboard light has indicated a problem. Pocket Tech displays the trouble code and code definition, which can easily be further researched on the Internet. This gives the owner, whether weekend tinkerer or complete novice, an idea of what's wrong with his wheels before rolling in to the repair shop.

At that shop, the customer may encounter Launch Tech's professional-grade equipment for mechanics. The company's presence in this market is better established than in retail. In the US, Launch Tech's three product lines are diagnostic, under-car and fluid-maintenance equipment - proven top sellers among all products the company has adapted from its initial Chinese business.

"In China, Launch Tech has everything in the automotive aftermarket," Qu said.

He was referring to the industry's secondary, or post-sale, market. It entails the manufacture, remanufacturing, distribution, retailing and installation of parts, fluids, equipment and accessories after a car or truck has been sold by the original-equipment manufacturer, or OEM, to the consumer.

The Automotive Aftermarket Products Expo, whose 2012 edition takes place this fall in Las Vegas, has more than 20 major product classifications. The market generated $285.7 billion in sales throughout the US in 2010, according to the Automotive Aftermarket Industry Association.

Diagnostics approach the modern car as though it's a human body. No longer is a vehicle taken apart for problem-checking; since the late 1980s, scan tools and attached computers have done the job of electronic pathologist.

The first generation of autodiagnostic equipment was costprohibitive, with most retailing at over $30,000, Rivilla recalled. "They were also as big as today's refrigerators," he said.

Over the past three decades, the detection devices have gotten smaller and cheaper.

"Automotive technology changes every year, and that will never change. For people who like tools, this is a good thing," said Jacques Gordon, editor of Professional Tool and Equipment News, a magazine for the autorepair industry.

Launch Tech, which is the world's third-biggest maker of diagnostic scan tools by revenue, offers the handset-size Diagun in its line of products for professional grease monkeys and savvy amateurs. The device is equipped with Bluetooth wireless technology for connecting to computers. The wireless feature means the Diagun enables one mechanic to do jobs that typically required two men, enhancing the repair shop's efficiency.

According to Qu, Launch Tech's tools enjoy the advantage of broad coverage; they're able to diagnose US, Japanese and European models, including "smart" and hybrid cars.

Through the use of its relatively new global diagnostic solution, or GDS, technology, the cost of a vehicle diagnosis could be slashed by two-thirds from the price of original-equipment scan tools that target only a specific manufacturer's makes and are available only to dealers of that brand.

Foreign cars and light-payload trucks accounted for 65 percent of the growth in light-vehicle aftermarket products in 2011, according to Jim Lang, president of Lang Marketing Resources and an expert in the vehicle-products industry. "The foreign vehicle aftermarket will achieve its strongest growth in the service sector, as foreign repair expands its 2011 share of the independent [nondealer] service market," he said.

To ensure that independent mechanics and DIY customers of its products always have the latest in vehicle coverage and repair information, Launch Tech made over 850 updates last year to its software offering and added an All Data link, the largest single source of OEM information on repairs and performance, to the GDS.

NBC television's International Innovators program in 2011 highlighted Launch Tech as an exemplar from Shenzhen, China's first special economic zone, based on its C-Recorder and X-Sonic Clean products. The two were among Motor Information Systems' Top 20 Tool Awards for

2008 and 2011, respectively. The C-Recorder, a kind of "black box" for cars, enables the owner to test-drive the vehicle and record crucial engine data for the repair shop, saving time that would be spent by the technician.

Also in 2011, Launch Tech USA was recognized as Vendor of the Year by Mac Tools at the automotive equipment distributor's National Tool Fair in Nashville, Tennessee, cited for outstanding performance in inventory, delivery, product innovation, sales and support.

Launch Tech Co. Ltd. was started in the early 1990s in Shenzhen as a computer hardware trading company by two brothers, Louis and Charles Liu. Two years later, through a product dubbed "electric eyes", the company entered the automotive aftermarket. In fact, "we're a pioneer in introducing the aftermarket concept to China", said Qu.

In 2003, he took about $7,000 in cash in his pocket with another Chinese colleague to start Launch Tech's US arm.

"We spoke Chinese English, in a goofy manner and asked some awkward questions," the CEO recalled. "At the very beginning, we looked a little bit clumsy, unprofessional, and we experienced a steep learning curve for a while."

That includes lessons such as litigation over patented technologies. Qu said proudly that Launch Tech hasn't "lost" a lawsuit and when it has settled, the company wasn't ordered to pay royalties or penalties or reimburse the plaintiff's legal costs.