Market Snapshot

Slow Sales, Tight Credit Shift Specialty Equipment Focus

Hummer sales suffered a 50% decline in 2008 compared to 2007 levels as consumers turned away from trucks, SUVs and large family sedans.

Looking for ways to reduce costs in 2009, automakers are trimming model offerings and canceling concepts and near-production concepts. Pontiac recently axed its G8 ST sport truck concept, while Honda canceled plans for a 2010 S2000.

Light-truck production schedules have also been cut and factories idled. Ford shut down its Michigan Truck Plant in late 2008 for retooling and also plans the closure of plants in Kentucky, Minnesota and Mexico in a shift away from trucks and SUVs to small cars like the Fiesta and Focus.

Compounding the automaker’s troubles are miserable sales (down 18% in 2008 from 2007, according to Ward’s Auto) and a squeeze on consumer credit. The credit market shows some signs of thaw—General Motors’ financial arm GMAC recently received direct government funding, and CNW Research notes that 81% of prime new-vehicle loans were approved—but consumers have shifted their focus.

The vehicles bought and sold in 2008 may have a direct impact on performance parts and accessory manufacturers. Some brands may not survive 2009, or at least with the same ownership. AutoPacific reports that Saab, Volvo, Saturn and Hummer have very uncertain futures.

Hummer in particular has been hit hard. Sales are down more than 50% from 2007 to 2008. Hummer accessory parts have followed suit; in 2005, manufacturers entered 14 new Hummer parts in the SEMA Show New Products Showcase. In 2008, that number shrank to four.  

This isn’t to say trucks are done. Nissan’s Titan was up 108% and Chevy’s Silverado was up 13% in December, although both offered substantial incentives.

As the mix of vehicles on the road shift towards smaller, more frugal vehicles, we can expect to see similar shifts in the specialty-equipment industry.

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