The record-high sales growth over the past two years for the automotive specialty-equipment industry is beginning to level off or subside, according to the newest SEMA market research report. Despite ongoing economic uncertainty, supply-chain issues, and rising costs, companies remain optimistic as sales remain solid and above pre-pandemic levels.
"Businesses experienced record-high growth the past two years," said Gavin Knapp, SEMA director of market research. "We saw growth that was above the industry's norm, so it makes sense that we're returning to more normal levels. It's great to see that most companies are up from 2019 levels."
Conducted every six months since 2021, the "SEMA State of the Industry" studies are designed to give companies clarity about the overall market during an uncertain time. The disruption from the pandemic made it difficult for members to understand what the market was going through and nearly impossible to forecast. Based on data from the automotive specialty-equipment industry, the reports give readers a barometer to gauge how they are currently doing and make predictions about what's to come.
The newest Fall 2022 version finds that 47% of manufacturers, 48% of distributors, and 44% of retailers expect sales to increase in the coming year. Additional findings include:
- Supply-chain issues continue to be disruptive for the industry. Over 90% of companies say that they are having a moderate or significant impact on operations.
- Inflation and the supply-chain issues are resulting in higher costs for businesses. More than 90% of companies reported an increase in supplier or production costs; most (around 80%) are compensating for the high costs by increasing their prices. Despite this, consumer demand and revenue remain strong.
- Ongoing supply-chain issues and high prices are slowing new vehicle sales. Sales are not expected to return to pre-pandemic levels until 2024 or 2025. Sales for 2022 are expected to fall about a million vehicles short of 2021, at 13.9 million total units. The average price of a new vehicle reached $48,301 in August 2022, a record high. The average price of an electric is even higher, at over $66,000.
The complete "State of the Industry—Fall 2022" report is available to download for free at www.sema.org/research.