SEMA News - June 2010 

Economy and Aging Consumer Base Bring Changes

By Steve Campbell

	Musclecar builders who would have shunned anything less than a strict restoration are now employing techniques that were once reserved strictly for street rods, with upgraded suspension and brakes, more highly refined engines, greater interior comfort, better gauges and real climate control systems.

Each of us may have different definitions of what constitutes a “hot rod,” but we all know one when we see it. The classification can encompass anything from a ’27 T-bucket roadster to a current-model Mustang, from a ’67 Camaro to a ’92 pickup, from a four-door station wagon to an early-‘80s Malibu. Only a few years ago, those last two might have raised some eyebrows among performance aficionados, but the wobbly economy and an aging consumer base have led to even greater latitude in what hot rodders consider acceptable raw material, and the segment’s manufacturers have obliged with an ever-expanding portfolio of parts from which to choose.  “The performance product industry is as strong as ever,” said Chuck Lenhart, sales representative for R&R Marketing Consultants Inc. “Despite the economy, performance businesses found ways to keep making outstanding new products and move them out the door. We are seeing more and more musclecars on the streets and at the car shows, which is a sign that people are driving them again. It’s time to get the hot rod out of the garage, shake some windows and wake the neighbors!”

Dennis Overholser, executive vice president of Painless Performance, attributes at least some of the market resilience to America’s large but aging post World War II generation. “Baby boomers are buying the cars they grew up with and restoring them to drive on a regular basis,” he said of the street-machine segment, while noting that street-rod builders are revisiting time-honored conventions. “Traditional styling is returning,” he said. “Billet is slowly going away in favor of paint. Steel and wire wheels are also on the comeback.”

	Cars that used to be reserved for shows or the drags are now seeing service in autocrossing, road racing and even at driving schools. Consumers are more aware of the entire performance package.

Perhaps the most prevalent trend on the hot-rod scene today is the metamorphosis from 100-point musclecar restorations toward the customization of vehicles that were less-than-stellar performers in stock trim. Vehicles that came off the assembly lines with anemic V8s or even V6s have become fodder for builders who are still seeking performance but have a diminished account from which to bankroll the effort.

“There have been some very nice ‘true musclecar’ restorations done lately, and I do not think that will ever go away,” said Del Austin, director of sales for Egge Machine & Speed, “but turning a musclecar into a restomod is much more affordable, drivable and enjoyable. They are being fitted with all the latest drivability features, and the engines are being used pretty much as crated—cleaned up and dressed up but pretty stock.” 

Musclecar builders who would have shunned anything less than a strict restoration are now employing techniques that were once reserved strictly for street rods, with upgraded suspension and brakes, more highly refined engines, greater interior comfort, better gauges and real climate control systems.

“They’re basically building a street rod out of a musclecar,” said Rick Love, executive vice president of Vintage Air Inc. “The only things they’re keeping from the original musclecar are the body and basic frame. Years ago, most of those cars were more restored; a lot of them are being upgraded. That seems to be the real area of growth right now.”

Love also said that today’s hot rodders have more refined tastes, access to more information and a higher degree of sophistication.

“If your daily driver is a late-model Mustang, Camaro or even a BMW, you’re going to want the hot rod you drive on the weekend to be more like a late-model car,” he said. “We know now what good steering is, what good brakes are, what real climate control or real handling is. You may like the look of the old car, but you want it to be on par with what’s available today if you’re going to drive it.”

And driving has become the name of the game. While there is still a highly respected contingent of car builders who trailer their creations to elite competitions and vie for high-end titles, such as America’s Most Beautiful Roadster or the Ridler Award, the mainstream has returned to the road. Car shows are replete these days with vehicles that arrived under their own power, and hot-rod competitions have also gone from strictly straight to maximum curves.

“People are using their cars in a greater variety of ways,” said Johnny Hunkins, editor of Source Interlink Media's Popular Hot Rodding. “They used to compete at just car shows and drags, but now they’re into autocrossing, road racing and even driving schools. They’re more conscious of the entire performance package, and they’re willing to tune them, break parts and make them better.”

In the street-rod market, tradition has resurfaced. Tried-and-true techniques have come back to the fore along with less-expensive buildups.

			“Education of dealers, installers and warehouse distributors has moved farther in the past three years than in the previous 10. The market is wide open to all manufacturers that want to listen to the consumer and build products that fit, work, are priced right and have factory backing.” —John Menzler, Comp Cams

“You see a lot more mainstream cars, such as ’32 to ’40 Fords, with straight axles, coil-overs and small-block engines,” said Bret Voelkel, president of RideTech. “It wasn’t unusual 10 years ago to see a $100,000 street rod that was all hand carved, hand rolled, hand everything. Now you can take your pick of a really nice steel street rod for $50,000–$60,000.” Voelkel also noted that the National Street Rod Association has opened its ranks to a sliding 30-year scale rather than only ’48-and-older vehicles, again demonstrating that the limits of acceptability have broadened—as has the desire for a little more luxury.

“Street rods used to be built solely for looks, not creature comforts,” said S. Kellie Colf, market development manager for Eaton Detroit Spring Inc. “They were widely built for limited mileage—a lifespan of 30,000 or so miles—but customers are now keeping their cars longer and are looking for improvements in ride and handling.”

Specialty-equipment manufacturers are taking advantage of the increasing drivability of hot rods by investing more in consumer events, said Greg Parker, sales representative for Kunzman & Associates. “They spend a lot of money in magazines to get to the consumer,” he said, “but they’ve also decided that they need to be in front of their customers in person. Consumers want to confirm what they’ve read to find out if what they’re considering will fit with their combination. The manufacturers have realized that they need to be at those consumer events so they can talk to the public and provide that confirmation.”

The movement toward better drivability and more comfort has been abetted by technology. Electronic systems in particular have improved every facet of performance. In addition, high-tech electronics in the form or computer-aided design and computer-aided manufacturing allow new products to come on line in a fraction of the time it used to take.

“Now you can draw and design a product and then bring it to life a few hours later,” said Michael Jonas, president of Stainless Steel Brakes Corporation. “We’ve seen that particularly in the development of suspension, which also affects our brake programs. Something that might have taken a year or more to develop is now being rapid-prototyped in as little as a week. That allows us to do more product development and testing.”

Computers have been a boon to hot-rod builders and performance parts manufacturers, but they have also altered the way people buy, use and even view cars and transportation. Obtaining a driver’s license used to be a right of passage, allowing young people to expand their horizons and broaden their social networks. Now those networks are being formed and traversed on the Internet, and at least two peripheral hot-rod segments that were once popular among younger buyers have suffered: late-model sport trucks and import tuning.

“A lot of vendors who were heavily invested in the import market were caught flat-footed,” said Hunkins. “We’ve seen quite a drop in sales for that market due to the economy. A lot of the price-sensitive youth hobbyists have gone away, substituting music or technology and not working with their cars. On the other hand, at least two of those companies that typically hadn’t been involved with our part of the market have started offering products for late-model musclecars.”

The Internet has also wrought industry-altering changes in the way products are researched, priced and marketed. Voelkel said that his print ads are now simply signposts that point the way to RideTech’s website, where each market segment is given its own section. “We can tell the whole story on the website,” he said. “Print ads are there simply to pique the consumer’s interest.”

Love said that computers and digital photography have allowed a more level marketing field. Just as they provide accelerated manufacturing processes, computers permit even small companies to produce high-quality advertising and promotional materials. “The advent of digital photography and Photoshop allow you to know immediately if your photo is good,” he explained. “The end consumer can now get a better feel for what he’s purchasing.”

	Market forces have provided far greater latitude about what may be acceptable as a “hot rod,” and the segment’s manufacturers have obliged with an ever-expanding portfolio of parts from which to choose.

Computerization has led to a revolution on the retail side in a number of different ways, as well. The market has become fragmented as small manufacturers target a select array of vehicles—sometimes only a single model—and produce parts for that specific niche. Where brick-and-mortar speed shops once catered to every segment of the hot-rod market, specialized Internet retailers today specialize in only a handful of products.

“Many businesses are now doing only drop shipments,” said Hunkins. “They take the orders, and the products are shipped direct from the manufacturer. It’s become a very compartmentalized hobby where special pieces are manufactured and marketed with very little cost.”

Retailers that do stock extensive parts lines must maintain a thorough inventory and good communications with their suppliers, said Jonas. They may otherwise miss sales either because they don’t know what suppliers have available or because they don’t have a product on their shelves.

“Education is the key to product sales and to keeping the customer,” added John Menzler of Comp Cams. “Education of dealers, installers and warehouse distributors has moved farther in the past three years than in the previous 10. The market is wide open to all manufacturers that want to listen to the consumer and build products that fit, work, are priced right and have factory backing.”

Manufacturer education is all the more critical in a market segment that mixes high-tech computerized systems with older vehicles that were originally less refined. Retailers and manufacturers have learned to rely upon each other to ensure that their customers receive the right parts for a given application.

	Electronic systems have improved every facet of performance. In addition to electronic fuel injection and drive-by-wire systems, high-tech electronics in the form or computer-aided design and computer-aided manufacturing allow new products to come on line in a fraction of the time it used to take.

“We listen to our dealers and retailers just as much as we try to give them information,” Love said. “Our customers are a lot better informed now than they were years ago. They use the Internet and read magazines, and they’re a lot more careful about where they spend their dollars. When they call a retailer, they expect the person they’re talking with to be as versed on the parts as they are. We have two-day dealer meetings and go to our larger dealers to promote product education. We try to keep our dealers as well-informed as we can. The Internet has made the world smaller.”

The world has also encroached on a hot-rod market that was once dominated by U.S.-based manufacturing. As trade rules have become more lenient, intellectual property rights and trademark violations have become more commonplace.

“The import of off-shore parts will be a never-ending problem,” Colf said. “But consumers and business-to-business customers soon learn the difference between high-quality and low-quality parts. A part that should have been relatively plug-and-play requires extra man-hours trying to either make it fit and work or having to engineer other systems to get it to work. People quickly realize that they could have had a no-fuss installation for just a few extra dollars, which usually turns out to be less than what they spent on extra parts or manpower because of the cheaper part.”

Colf noted that legislation within our own boundaries also bears watching. “We as an industry need to continue to be aware of any legislation affecting our hobby and make sure our voices are heard,” she said. “Unfavorable legislation alone could be enough to kill the hobby.”

Vigilance must be coupled with quality products, knowledgeable sales teams and unending innovation. Hot-rod enthusiasts thrive on building, improving and using their vehicles.

“If you can provide information—advice on how to use a particular product, how to install it, how it fits an application—customers will gravitate to you,” Voelkel said. “Offer a different finish, a different performance level, expedite shipping or figure out how to make something less expensive without sacrificing quality or service. The people who can do that are going to have the most to offer the customer.”