In October, the SEMA Performance Parts and Accessories Demand Index (PADI) lost three points, or 4.6%, going from 94 in August to 72—after dropping to 75 in September—showing that the number of consumers who plan to make specialty-equipment purchases has declined from the previous month. Overall however, the SEMA PADI showed strong increases from April to August.
SEMA began developing the PADI in January 2007 for the purpose of tracking America's anticipated demand for performance parts and accessories, such as specialty appearance, racing, performance and suspension products, as well as wheels and tires.
We have all heard reference to economic indexes, such as CPI, PPI and GDP. Each is a quick measure of some aspect of the United States economy. The Consumer Price Index (CPI), for example, is a measure of the average change in the prices paid by urban U.S. consumers for a selected group of goods and services. Although similar to economic indices, the PADI isn’t designed to report past activity, but rather consumer expectations of future purchases from the specialty-equipment industry.
The SEMA PADI is a weighted composite index set to an initial value of 100 based on demand levels between January 2007 and March 2007. During those months, between 25%–30% of consumers reported plans to purchase performance parts and/or accessories during the next 90 days. The Index and three sub-indices (for each product segment) are based on responses to the following questions:
1: How likely are you to purchase specialty accessories and appearance products, such as interior trim, restyling products, graphics, a sunroof, etc., for your vehicle in the next three months? Would you say very likely; somewhat likely; not very likely; or not at all likely?
2: How likely are you to purchase racing and performance products such as internal engine parts, drivetrain, exhaust system, fuel system and ignition components designed to improve performance through increased durability, capability or dependability, for your vehicle in the next three months?
3: How likely are you to purchase wheels, tires and suspension components, such as specialty shocks, struts, lowering packages, lift kits, custom wheels, performance tires or performance brakes (not including regular brake changes for your vehicle), in the next three months?
The indices track consumer plans to purchase performance parts and/or accessories within the next three months after each respective survey. The October index, for example, forecasts consumer purchase intentions for November through January 2008. The indices and their movements reflect the national market for automotive specialty products, which consists of more than 114 million U.S. households.
The index is based on a monthly Random Digit Dial (RDD) telephone survey to collect the data, typically gathered from about 1,000 nationwide interviews with adult American drivers. The margin of error is +/- 3.3%.
Although the PADI is not a precise measure of absolute future purchasing activity, it is a tool for understanding and predicting industry sales. There are two ways of interpreting the PADI: direction (whether the index is rising or falling) and values (which provide a guide as to the degree of change in consumer expectations for purchasing industry products).
SEMA will provide monthly reports on PADI results. This month, 19% of adult American drivers (or approximately 19 million households) indicated that they had plans to purchase aftermarket products sometime within the next three months. Over the last three months, on average, midsize cars (21%) and trucks (19%) were the most common target vehicles for personalization, followed by compact cars and fullsize cars (both at 15%).
When consumers were asked what form their vehicle would take after customization, the most common response was that it would be restyling (general personalization) at 43%, followed by street performance with 13%. Wheels, tires and suspension components were the most popular aftermarket products consumers were likely to purchase (12%, or approximately 12 million households), followed by racing and performance products (9%) and specialty accessories/appearance products (8%).
SEMA has contracted with TechnoMetrica to gather the data used in building and maintaining the SEMA Performance Parts and Accessories Demand Index. Each month TechnoMetrica uses a Random Digit Dial (RDD) telephone survey to collect the data, and responses typically number between 850–1,000.
For more original specialty-equipment market research, visit www.sema.org/research.