In December, the SEMA PADI improved by six points, or 9.0%, going to 77 and reversing the drop experienced in previous months from 75 in September. In December 2007, approximately 21-million American households indicated that they had plans to purchase performance parts and accessories within the next three months.
Overall, the SEMA PADI showed strong increases from April to August, trailed off from September through November, and rebounded in December. This may be an indication of the sales cycle we find for many of the industry’s products. The index and three subindices (for each product segment) are based on the responses to the following questions:
- 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?
- 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? Would you say very likely, somewhat likely, not very likely or not at all likely?
- 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? Would you say very likely, somewhat likely not very likely or not at all likely?
The indices track consumer plans to purchase performance parts and/or accessories within the next three months after each respective survey. Grouped by major product segments, consumers indicate they are most inclined to purchase wheels, tires and suspension products during the next three months, followed closely by racing and performance parts.
Although similar to economic indexes, the index SEMA has been working on isn’t designed to report past activity, but rather consumer expectations of future purchases from our industry. SEMA began developing the Performance Parts and Accessories Demand Index (PADI) in January 2007. The purpose of the index is to track anticipated demand for performance parts and accessories, such as specialty-appearance products, racing and performance products, and wheels, tires and suspension products.
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% and 30% of consumers reported plans to purchase performance parts and/or accessories during the next 90 days.
Over the last three months, on average, midsize cars (24%) and pickups (19%) were the most common target vehicles for personalization, followed by fullsize cars (15%) and compacts (14%). When consumers were asked what form their vehicle would take after customization in December, the most common answer was that it would be general personalization (restyling) at 68%, with street performance coming in second at 7%, while off-road and restoration tied for third with 6% each.
Although the PADI is not a precise measure of absolute future-purchasing activity, it is nonetheless 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 has contracted with TechnoMetrica to gather the data used in building and maintaining the PADI. Each month TechnoMetrica uses a Random Digit Dial (RDD) telephone survey to collect the survey data. Typically, the responses total between 850 and 1,000 in any given month. The margin of error is normally within the plus or minus 3%–4% range. SEMA will provide monthly reports on the results of the PADI.
For more industry-specific research, please visit www.sema.org/research.