Market Snapshot


GM’s plan to trim production at half a dozen North American plants—announced earlier this week—has heightened fears that the auto industry is in for a longer U.S. downturn than many had expected, according to report from The Wall Street Journal. The slowdown is intended to minimize excess supply in the third and fourth quarter and stave off the rebates and incentives that Detroit’s automakers traditionally have used to boost sales the past six years. 

GM didn’t disclose how many fewer trucks and SUVs it would build, but the plants affected include those that produce the GMC Sierra and Chevy Tahoe, the Journal noted. U.S. SUV sales were down nearly 6% in July compared to the same period last year, while sales of fullsize trucks dipped 5%.

Rising gas prices and a crashing housing market—the latter affecting not only consumer confidence, but also truck sales to contractors—are largely held to blame.

Still, the dip in production, which could also affect Ford and Chrysler, isn’t likely to hit the specialty-equipment market too hard. SEMA research shows that even as Big Three truck sales have declined since 2004, truck accessory sales have grown: 12% in 2004, 10.2% in 2005 and 6.3% in 2006. That doesn't mean the ripples won't be felt, however.

“Most of the products that we sell are based on new truck sales,” says Competition Specialties Inc. president Ken Woomer. “With the slowdown in truck sales, this year has not been the easiest for CSI — and I’m sure I’m not alone. We [WD’s] have been a bit spoiled by tons of trucks flooding the market and sales falling in our laps.”

Still, Woomer regards the GM news – and any possible Ford or Chrysler announcements – with interest, but not alarm.

“For us, dealerships represent maybe 10-15 percent of our total volume,” he notes. “We have a very small portion of that business. So if this is a way to get [GM] profitable, I’d rather deal with that this year—get them profitable and have them there in the future!

“This is interesting news, but I’m not going to look at it as a doom-and-gloom picture. You’re still going to have people accessorizing older vehicles. Our [older model] sales are still very strong."