SEMA News -- April 2009

By Ty Michael and Zack Krelle

Pitting Performance Against Appearance: Which Is More Important Now?
SEMA News, April 2009, Research, Compact Performance and Urban Market Update

Nissan’s 240SX, Honda’s Civic and
Mitsubishi’s EVO topped the list of vehicles
owned by enthusiasts that have an affinity for the compact-performance market.

Over the years, quite a bit of attention has been paid to both the compact-performance and urban-lifestyle markets. At their respective roots, each market is very different: Compact performance has involved enthusiasts looking to enhance the performance (hence, the name) of small economy and sports cars and the urban market had a completely opposite makeup of enthusiasts who were more concerned about vehicle appearance, typically involving large sedans and SUVs. Today, these differences still exist in many ways. However, both compact-performance and urban enthusiasts now share enough similarities to bring these segments of consumers closer together.

Urban-lifestyle enthusiasts have one very prominent trait that carries over from the early days of lowriding to the heyday of oversized wheels on pickups and SUVs to today’s more moderate mixture of each: Style and being different is of utmost importance. Add to that the need to infuse interests in music, sports, entertainment and vehicle performance (since big wheels need big power in order to at least make up for the extra weight). One distinctive crossover sub-niche, the Americanized VIP market, employs styles similar to the urban market (i.e., body kits, expensive wheels, lowered profile) with a twist. Even the pure compact-performance market shares some vehicles and lifestyle behaviors with those in the urban-lifestyle market.

Knowledge of enthusiast lifestyles plays an important role when specialty-equipment companies plan their marketing strategies for one main reason: successfully capturing and attracting the attention of potential customers to the company’s brand.



SEMA News, April 2009, Research, Compact Performance and Urban Market Update

Vehicles, such as this Dodge Charger
underscore the recent stray from the traditional
formula for urban enthusiasts and illustrate the dominance of performance and style.

Speaking the language of a particular target market (i.e., understanding the values that potential customers hold) increases the chance that finicky consumers tuning in to a company’s brand eventually make a purchase. Urban-lifestyle enthusiasts, for example, are very much involved with branding—three out of four surveyed via the Automotive Lifestyles Study said that brand name was important when making a purchase. Nearly the same percentage of compact-performance enthusiasts said the same thing.

Creating and maintaining a particular brand image is important, especially among the younger urban and compact-performance segments of consumers. However, branding embodies different meanings for the two crowds.

Urban-lifestyle enthusiasts seek labels with an established reputation for style. These companies are known for their attention to lifestyle elements (music, fashion, etc). In contrast, compact-performance enthusiasts set their sights on brands that have an established distinction for performance.

Automotive Lifestyles and Specialty Equipment
SEMA News, April 2009, Research, Compact Performance and Urban Market Update

Table 1
Ford Mustangs have a mainstream appeal while the Nissan 240SX is more specific to the compact-performance market.

Automotive enthusiasts are surveyed by SEMA every year through the Automotive Lifestyles Study in order to learn about their accessorization trends and buying behaviors. When sufficient numbers of enthusiasts who identify with a particular market segment are surveyed, their specific personalization habits are profiled. Both compact-performance and urban-lifestyle enthusiasts were looked at in this case, and the results showed, for example, that 37% of all enthusiasts surveyed indicated that they were interested in compact performance and 25% stated interest in urban-styled vehicles. In each case, these enthusiasts also subscribed to the respective market segment magazines and engaged in lifestyle and social activities generally indicative of each particular market segment of enthusiasts—i.e., racing, attending car shows, going to concerts, etc. For the sake of comparison, urban-lifestyle and compact-performance enthusiast data are shown side by side with that of the entire sample of automotive enthusiasts (i.e., hot rodders and off-roaders, musclecar enthusiasts, restoration-vehicle enthusiasts and those into light trucks, in general).The most recent Automotive Lifestyles Survey was administered in August and September of 2008, with a total of 3,037 complete responses. Enthusiasts surveyed included subscribers to 21 different automotive magazines as well as visitors to popular automotive forums and websites. The average age and household income of those surveyed was 40 years old and $91,000, respectively. Had the survey been conducted using a random sample of enthusiasts, the confidence interval (i.e., the estimated value range in which the survey results could lie) would have been ±1.78%.

Let’s start with the vehicles. Enthusiasts claiming to be part of the urban-lifestyle segment of consumers own a diverse array of cars and light trucks. Topping the list of vehicles driven by urban enthusiasts were Ford Mustangs, Chevrolet Corvettes, Ford F-Series pickups and Honda Civics (see table 1). Other more notable “urban” vehicles, such as the Chrysler 300 and Cadillac Escalade, have more presence at urban-lifestyle targeted car shows; however, actual enthusiasts sporting an “urban” look often drive vehicles characteristic of a multitude of market niches. Urban enthusiasts also have an eye for luxury (shown by the two Lexus models also making the list of most-owned vehicles) as do those involved in the compact-performance scene, where the Nissan 240SX, Honda Civic and Mitsubishi EVO topped the list.

Another significant point where compact-performance and urban enthusiasts share similarities is in the products they purchased. When the enthusiasts were asked what performance parts and accessories they purchased over the last year, it became apparent that both performance and appearance products play an important role to these two
SEMA News, April 2009, Research, Compact Performance and Urban Market Update

Table 2
Similar products top the lists for both segments, however, urban enthusiasts favor milder performance upgrades and aesthetics. Window tinting and alarm systems are some of the exceptions.

groups (see table 2 and 3). Performance parts, such as cold-air intakes and exhaust kits, were purchased by large percentages of those surveyed; however, those within the compact-performance market purchased to a greater degree. While both products arguably provide marginal performance gains compared to more advanced engine and drivetrain upgrades, enthusiasts are attracted to the relatively low price, appearance under the hood, noticeable sound and performance improvements provided by these products. Also, appearance products and mobile-electronics upgrades (such as body kits and stereo head units, respectively) are more popular among compact-performance and urban-lifestyle enthusiasts compared to all the automotive enthusiasts surveyed.
Differences Among Automotive Enthusiasts
SEMA News, April 2009, Research, Compact Performance and Urban Market Update

Table 3
Compact-performance enthusiasts, on the other hand, lean heavily on performance. Tires are standouts, and suspension upgrades signal a preference for handling.

The last piece of the enthusiast puzzle is how urban-lifestyle and compact-performance enthusiasts actually differ. Besides vehicles owned, compact-performance enthusiasts are heavily geared toward performance, while urban-lifestyle enthusiasts lean more toward appearance. Around 95% of enthusiasts within the compact-performance niche said that they specifically customize their vehicle to increase performance, while 87% of urban-lifestyle enthusiasts gave the same response (8% is a significant difference). In contrast, 36% of the same enthusiasts said that they prefer to modify the appearance of their vehicles over performance, and while this is a relatively small percentage, it is more than double the 16% of compact-performance enthusiasts who prefer appearance over performance. Another significant difference involves place of purchase among these two groups of enthusiasts. Both groups indicated that they purchased the largest percentage of their specialty equipment at online retail stores, but 39% of compact-performance enthusiasts indicated so compared to 24% of urban-lifestyle enthusiasts (see table 4, left).

SEMA News, April 2009, Research, Compact Performance and Urban Market Update

Table 4
Catalog mail-order purchases are lower for both groups than for the general enthusiast. Internet venues are the most cited, especially for compact-performance consumers.

Compact-performance and urban-lifestyle enthusiasts also differ with respect to demographics. The urban group tended to be a bit older while earning a substantially larger household income compared to enthusiasts within the compact-performance market. On average, urban-lifestyle enthusiasts surveyed were 33 years old, whereas compact-performance enthusiasts were six years younger. Also, the average income of enthusiasts within the urban-lifestyle market was nearly $17,000 more than their compact-performance counterparts.

The data presented in this article is quite comprehensive, but one thing to keep in mind is that automotive enthusiasts of all forms have similarities and differences but are all potentially profitable customers if correctly targeted. This means that a thorough understanding of compact-performance and urban-lifestyle enthusiasts will significantly improve the chances of getting a company’s products into the hands of its desired consumers.

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