SEMA News—July 2011
Creativity, Customer Choice Help Fuel the Market
Providing customers with a wider variety of personalized, affordable accessory choices is the biggest advantage that restyling companies have over OEM accessory offerings, but specialty-equipment accessories need to meet OEM quality levels and match OEM warranty standards.
In 2010, however, there was a slight increase in the restyling market, as retail sales hit $3.87 billion. Now restylers are taking advantage of opportunities to provide consumers with the comforts and amenities they want that are no longer offered by the factory or only exist in a pricey accessory package. The key for new- and used-car dealerships is understanding that the restyling industry’s ability to increase sales can be an opportunity that will shape both entities in the years to come.
“In our region, dealerships have seen an uptick in business recently,” said Joey Johnston, owner of Tops and Trends in Fletcher, North Carolina. Johnston said that educating the dealership is key to a profitable partnership, as is communicating his company’s use of certified technicians and its ability to create accessory packages that suit the varying tastes of customers. However, the sales need to be at or exceeding the expected levels for dealerships, which rarely will sink more money into vehicles to move them off the lots when sales are flat.
“When consumer sentiment is higher, customers are willing to consider more amenities for their vehicles—leather interior, navigation, sunroof, upgraded audio, wheel packages,” Johnston said. “This is when the restyling market can set in motion one of its main advantages: providing specific choices not available from the factory. The benefit that I have is the ability to create packages that can fill in the gaps that the OEMs can’t compete with, and this provides the vehicle dealer something that helps close sales: providing the customer with more personalized choices.”
Whether it’s a new navigation unit or personalized leather package, the products and services restylers offer are often used to close sales at dealerships, making quality and customer satisfaction key factors to profitable and healthy dealership-restyler partnerships.
Peck emphasized that it’s important for restylers and installers to be affiliated with and to stand behind the products and services they provide. Customer dissatisfaction with the work or product will have a negative effect on the restyler, the vehicle dealership and even the automaker.
“One of the companies that we use is able to provide leather packages, interior upgrades and more wheel styles than what are offered from the factory,” Peck explained. “But, the best part is the customer service they provide, regardless of the problem; they get involved until the issue is resolved and the customer is satisfied.”
However, Peck also emphasized the importance for restyling companies to understand that he is in the business of selling cars, and when the end of the month approaches, cars need to move from the lot.
“The reality is that I am trying to move vehicles, and I use products offered from restyling companies as closing tools,” he said. “It’s about closing the sale. And if your sunroof, leather package or navigation unit is what tipped the scale, your company needs to come through with the quality product, service and care that you said you’d deliver.”
Vogue Tyre and Rubber Co., in the tire business for 97 years, operates several Vogue Custom Centers located in dealerships throughout the United States, including in California, Texas and Florida. The company concentrates on plus-size applications mainly for Cadillac, Mercedes-Benz and Lexus vehicles. While Executive Vice President Kevin Goyak said that the past couple of years have been a challenge, there is an important silver lining.
According to Goyak, a major benefit of having Vogue Custom Centers at the dealership level is financing. One of the realities that the industry is struggling with is getting people approved for financing.
With the decline in new-vehicle inventories, accessories will be just as important for auto dealers’ used or certified pre-owned vehicles as they are with new-vehicle sales.
The company is also producing a new V Signature line that Goyak said will not only offer consumers an additional option at the time of vehicle purchase but also provide a higher-mileage warranty compared to original equipment.
Used cars offer another area of opportunity. As vehicle inventories have dwindled and the recent disaster in Japan has impacted vehicle availability from Nissan, Honda and Toyota, dealerships are not receiving the replacement vehicles that they are used to getting.
“We are seeing Honda, Toyota and Nissan feeling the pinch of a lack of inventory,” said Jon Titman, vice president of sales for Automotive Essentials in Rockville, Maryland. The main sellers for his company are sunroofs, leather interiors, mobile audio and video and navigation. He anticipates Japanese automakers putting more emphasis on one- and two-year-old used cars and, during the summer, those dealerships will have vehicles in stock as certified used vehicles.
“If you want to make money on certified used cars,” he said, “accessories will be just as important as they have been with the dealer in the new-car department.”
The keys to today’s restyling market are identifying changes in the market, upfitting used vehicles, offering competitive accessory packages with price points and options automakers can’t compete with, emphasizing customer choice and providing
“The market is changing, and I suggest that restylers do their homework,” said Johnston. “Get out there. Be active. See what trim levels and packages the factory is offering, and find a competitive option that provides dealerships with tools to close sales and provides customers with the affordable, personalized accessories they want.”