There is no doubt that consumers are buying fewer new vehicles due to economic concerns, high gas prices and the increased difficulty of securing financing. Throughout 2008, the number of consumers who have entered new-vehicle dealerships has been on the decline, according to data obtained from CNW Marketing Research. The company’s Floor Traffic Index, which tracks levels at which vehicle buyers actually enter new-vehicle dealerships every 10 days throughout each month, averaged just above 100 in January but dropped just below 60 in September.
There is, however, good news for the specialty-equipment industry despite weak new-vehicle demand. Demand for specialty equipment is now starting to bounce back as dealership visits continue to decline. The SEMA Performance Parts and Accessories Demand Index (PADI) which tracks consumer demand for specialty equipment, has risen over the past two months despite the dismal demand for new vehicles.
The SEMA PADI is devised from a survey administered to roughly 900 consumers each month, which helps predict whether consumers plan to purchase custom parts and accessories within the following three months of each respective survey. The chart above compares 2008 PADI data to the CNW Floor Traffic Index to show that, while consumer demand for new vehicles is dropping off, their intent to personalize the vehicles they already own is trending upward.
The SEMA PADI is calculated using a monthly random digit dial (RDD) telephone survey to collect the survey data. The margin of error is plus/minus 3.3%.
Consumers are holding on to the vehicles they already own a bit longer than they perhaps expected to, causing new-vehicle sales to continue decreasing over last year’s sales. However, high fuel prices have sparked interest in buying performance parts that also help to improve fuel economy and accessories to enhance the look and feel of older cars and trucks on the road.
For more original SEMA Market Research, visit www.sema.org/research.