It may be challenging to find positive automotive news stories in the current maelstrom of slumping sales, negativity and bleak forecasts. Automotive manufacturers continue to cut production plans, consumers are unable to purchase new vehicles and estimates for the near term appear no less gloomy.
But the new-car market and the specialty-equipment industry are different. Sales of new passenger vehicles help drive custom parts and accessories, but the greater majority of activity is based on the fleet of vehicles people in the hobby presently own.
SEMA collected data from more than 3,000 consumers during the third quarter of this year and compiled vehicle information on the projects they own. Only 22% of vehicles were purchased within the last year. Of those, the largest percentage was acquired before the latest downturn. Based on this sample, the remaining 78% of the market consists of previously held vehicles.
This meltdown has stunted new-vehicle sales, and consumers will begin to retain their vehicles for longer periods and hold on to the projects that they already have. This increased duration of ownership could be viewed as a helpful boost, especially considering research and development costs for new products.
When enthusiasts are ready to make a vehicle purchase, they opt for used vehicles 72% of the time. Nearly three out of four purchases are targeted to this marketplace, placing the overwhelming demand on preexisting items. Furthermore, the database of cars submitted by enthusiasts tells the same story. Nearly 55% of vehicles were produced from the early '20s through the '90s. That number jumps to 77% if the range is extended to 2004.
New-vehicle sales are an important source of revenue for many manufactures of custom parts and accessories. It is important, however, to keep perspective and understand the composition of vehicles in the complete market and to realize that while the industry is tethered to the automotive industry in general, it remains distinctly independent.
Finally, input from a variety of sources confirms the notion of market uniqueness. Every segment is different and some are more insulated from market forces than others. The traditional hot-rod mentality continues to resonate throughout all parts of the community and evade the slumping economy.
For more original market research, please visit www.sema.org/research.