SEMA News - November 2010
Wheels, Tires and Performance Products Among Top Interests for Retailers and Wholesalers
By Linda Spencer
International buyers continue to be a growing and increasingly important component of the SEMA Show. This is the first of a series of reports that will profile buyers from particular key overseas countries—in this case, Brazil—and that will focus on which products they currently carry and which they are seeking. The data on the interests of the Brazilian buyers is excerpted from a report prepared for SEMA by Hedges & Company which analyzes registration and hall activity. Copies of the report are available online at www.sema.org/bz10.
These reports are being prepared in the midst of a sharp increase in both the number and percentage of international buyers attending the SEMA Show/Automotive Aftermarket Industry Week (AAIW). In fact, the estimated attendance from Brazil increased 49% from 2008 to 2009. The country’s attendance rebounded from a 17% decrease from the 2007 and 2008 Shows to a net increase of 23% since 2007.
Retail/jobber was the top business classification, with 23% of Brazil’s estimated attendees claiming that category. Wholesalers were second with 14%, followed closely by repair service/installer with 13%.
Brazilian buyers were extremely qualified. Their ability to make buying decisions and buying recommendations—or net buying influence (NBI)—was notably high at 94%. That is higher than the 90% NBI for all international buyers and 87% NBI for all SEMA
The lower level of the South Hall was the most likely exhibit area in which to find international buyers, as that was their most popular destination, and Tires, Wheels & Equipment was the product category that they were
most interested in seeing. Four of the top 10 products of interest selected by these buyers were related to tires and wheels. The performance section was also highly sought after and saw a significant amount of foot traffic from the Brazilian contingent.
The list of product interests was almost identical to the list of products this group currently carried, and these buyers attended the Show primarily to find products to add to their current inventory. The interests of the Brazilian buyers were closely mirrored by a panel of international judges who selected products for the Global Media Awards (GMA). SEMA hosts the awards annually, and for the sixth year, a panel of top automotive journalists from 15 countries throughout Asia, Europe, South Africa and South America—including a half dozen from Brazil—served on the GMA panel. The judging group selected a total of 150 products this year based on international appeal. Each of the participating media members was charged with selecting the 10 products that they thought were best suited for their home markets.
Ricardo Puerta of Revista Car Tuning had definite opinions about what he thought would do best in São Paulo and throughout Brazil. “It’s common to lower the vehicle, install big wheels and modify external and internal parts, the sound system and engine power,” he said.
Musclecars are also becoming very popular in Brazil, with enthusiasts investing large amounts in them. That could mean a good opportunity for appropriate products. However, the majority of Brazil’s market is composed of front-wheel drives and sport-compact cars with four-cylinder engines, said Eduardo Bernasconi of Full Power magazine. “Performance upgrades are welcome for the engine and mechanical parts, including brakes, suspension, lightweight wheels and exhaust systems,” he said.
Indeed, among the top choices by Bernasconi and Puerta were wheels and tires as well as a number of performance products for racing vehicles and musclecars. (A complete list of the GMA-winning products is available by contacting Casey Kooiman at firstname.lastname@example.org.)
The Brazilian market is growing rapidly and is already the fourth largest in the world. For the first quarter of 2010, 1.25 million new cars and light vehicles have been registered—a 13% increase from the same period last year. Fiat, Volkswagen, General Motors and Ford are all registering big sales. GM reports strong sales in Brazil, and industry insiders predict that Brazil will become the second-largest market for Ford outside the United States sometime in 2010, displacing the United Kingdom from that position.
Brazil does have a strong customization and racing culture, and U.S. products are sought after. Even so, U.S. companies seeking to sell into the largest market in Latin America have to contend with high tariffs on imported product as well as government restrictions on customization. European styling is also quite strong in Brazil, with even U.S.-branded cars in the marketplace often being the European models rather than the U.S. types. Serious consideration is needed regarding which products might do well in this large territory, but the sales of automotive specialty-equipment products are growing in Brazil, with Rio, São Paulo and Curitiba among the most popular markets.
2009 SEMA Show
Top 10 Product Interests
Exterior Accessories 63%
Interior Accessories 58%
Engines/Engine Parts/ 58%
Alignment/Tires, Wheels 50%
Tires and Wheels (Tools) 50%
Replacement Parts (News) 45%
Engine and Diagnostic 40%
Source: Compiled by Hedges and Company
n SEMA meeting with Brazilian distributors about the growing market in that country.