SEMA News - August 2009

By Joe Dysart

Holding Out for Windows 7: A Wise Move?

Microsoft has posted an informational video on the forthcoming Windows 7 on its website.

The reason: Microsoft drove another bloody stake into XP on April 14, 2009, when it officially ended “mainstream support” for the OS. This means that your warranty on XP is void. It also means that if you want support on XP other than basic patches or basic security upgrades, you’ll have to pay Microsoft under a separate, “extended support” agreement.

Got an unusual problem you’re having with XP that you need resolved? That’ll cost you. Need to add a new device to your system that isn’t currently supported by XP? You’ll have to pony up for that, too. Even worse, Microsoft may return the bad news that XP will never support a new device or new software you’ve recently added.

It’s a nasty jolt that has many businesses once again re-evaluating their commitment to XP and wondering if they really can skip Vista altogether and simply wait for Microsoft’s next upgrade, Windows 7, which is due out in the first quarter of 2010.

Not surprisingly, the case for hanging tough with XP until you see the whites of their eyes is still very strong. Despite numerous attempts by Microsoft to convince businesses otherwise, Vista is still very much a flop. Initial reports that Vista was slower than XP, featured draconian, productivity-sapping security provisions and would not work with a raft of hardware and software have stuck. That same image continues to haunt the OS.

Even today, less than 10% of all businesses in North America and Europe use Vista, and 71% of those businesses still use and swear by XP, according to a January 2009 report from Benjamin Gray, an IT analyst with market research firm Forrester.

Indeed, business support for XP has been so strong that the sentiment has forced Microsoft to grant some major computer makers the right to continue to sell new XP PCs right alongside machines sporting Vista. Those same computer makers have also snagged the ability to woo buyers leery of Vista to “downgrade” to XP on any Vista machine they buy. Talk about a public relations nightmare.

Moreover, “hold-out” mentality is further being buttressed by the numerous, positive oohs and ahhs surfacing about the first beta version of Windows 7, which was released earlier this year. The evaluation by Matt Hartley, a reviewer for Lockergnome, a highly respected industry insider publication, is typical.

“After spending a few days with the Windows 7 beta, I will admit that overall, it proved to be vastly better than I expected on a few important fronts,” Hartley said. “The biggest front proved to be the speed front. From installation to the first boot, the OS release did really well.”

Vista never lived down its image as a cumbersome, resource-hogging, often incompatible operating system.

“More than five times as many users will run the beta version for Windows 7 as ran the beta for Windows 95,” said Michael A. Silver, an IT analyst with market research firm Gartner. “More importantly, the instrumentation by which Microsoft will get data back on performance and software features did not exist when Windows 95 was in beta and is significantly improved compared with what was available with Windows 2000. This enables Microsoft not only to receive more data, but also to characterize and classify the problems and work with vendors responsible for a large number of the problems to fix them before the product ships.”

Another plus: Microsoft plans to offer XP stalwarts an upgrade discount once Windows 7 hits the streets. Under the plan, XP users will still need to do a clean, complete install of Windows 7 rather than popping in a disk and letting XP do an auto-migrate to Windows 7. But even so, XP users know that they can save real money if they stay with what they have and upgrade only when Windows 7 becomes available.

Of course, there is some real risk involved for businesses that want to stick with XP until the bitter end. While basic security patches for XP will still be available, other more esoteric security threats may be less of a priority at a company that is more interested in selling Vista and Windows 7 than in supporting an OS that it considers passé. Essentially, IT managers who opt for tried-and-true XP won’t look like wunderkinds if a security breach brings down the entire company computer system and has no known solution.

Given that Windows 7 is really an incremental upgrade of Vista, there’s also a lot to be said for migrating away from XP to Vista, working out the kinks and being ready to go to Windows 7 when it hits the market. The reality is that, like it or not, companies planning to stick with Microsoft are going to be running on a Vista-like system during the next couple of years one way or another. They might as well get used to it.

Moreover, migrating to Vista in preparation for Windows 7 will also enable many companies to hold off on installing Microsoft’s first attempt at Windows 7 and instead wait for the first service pack for the OS to be released. The conventional wisdom with this approach is that businesses will be able to operate with a seasoned copy of Vista, allow pioneers to go through the inevitable growing pains anticipated with the initial release of Windows 7, and then be ready to migrate with a much more stable and refined Windows 7, SP1.

Deciding to let go of XP also makes sense considering that the OS would be already dead if Microsoft had its druthers. It’s hard to go up against a giant company, year after year, if that company really prefers that you part with more coin to stay in its good graces. Granted, XP users worldwide have been able to tame the Goliath from Redmond so far, given that reviews for Vista have been so uniformly negative. But this time around, initial reviews of Windows 7 are heavily in Microsoft’s favor. It’ll be much tougher to say “no thanks” to Microsoft if it rolls out a new, gleaming Windows 7 that has the same, positive reviews.

Bottom line: Business users who are perfectly happy with XP, do not plan on doing a major computer hardware upgrade during the next few years and are willing to assume a prudent risk when it comes to a security vulnerability that may or may not materialize will probably be staying with XP until Windows 7 delivers on its promise.

But businesses that are planning major computer hardware upgrades soon and would rather prepare for the inevitable move to Windows 7 than be last to the party will want to think long and hard about making an initial migration to Vista or being among the pioneering firms that adopt Windows 7 the moment it drops.

Joe Dysart is an Internet speaker and business consultant based in Manhattan, New York.
Voice: 646/233-4089
E-mail: joe@joedysart.com
Website: www.joedysart.com

SEMA News - August 2009

By Linda Spencer

Gateway to the Middle East

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies. There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for,” said Jim Cozzie, SEMA Board of Directors Immediate Past Chairman.

Of that number, said organizer Epoc Messe Frankfurt GmbH, 46% were international visitors who had converged on Dubai from 114 countries.

“The United Arab Emirates (UAE) and the Gulf region are very important markets for Evosport, as they represent a growing percentage of our business,” said Simon Atik about his retail and wholesale accessory sales company based in Huntington Beach, California. “It’s also a very exciting time, as the potential for the specialized aftermarket is immense, albeit in its infancy stages. The entire Gulf region is exploding with potential buyers, and there is an overwhelming demand for quality products.”

Bob Scheid of Perry, Ohio-based Fidanza Engineering Corp. was also among the visiting SEMA contingent and agreed that the UAE represents a real opportunity.

“We like to believe that Americans love their cars and this hobby more than anything else,” he said. “I really think we have some competition with what I saw. Not only is there passion, but they have the disposable income to spend. The markets are so similar in that they want good quality parts. The market in Dubai is not only the same, but they are willing to pay much more for quality. In the U.S., we love to customize, but there they want to do whatever it takes to make sure that their car is like no other on the road. If you pull up to a light and see two Corvettes, they will almost certainly be built totally differently. Uniqueness is not a goal; it’s mandatory.”

SEMA Immediate Past Chairman Jim Cozzie noted that SEMA traveled to the region to determine the viability of the market and identify the opportunities as well as hurdles regarding entry to the marketplace for member companies.

SEMA Board of Directors Immediate Past Chairman Jim Cozzie (left) and SEMA CEO and President Chris Kersting answered questions on car modification regulations at a seminar during Automechanika Middle East.

The UAE is a federation of seven emirates, including the capital, Abu Dhabi, as well as Dubai. Founded in 1971, this small but wealthy nation has a population of 4.7 million. The UAE borders Saudi Arabia and Oman and serves as the gateway to the other members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman. A significant percentage of products are shipped to Abu Dhabi or Dubai and then re-shipped to other GCC or middle Eastern countries.

The specialty-equipment market is quite new to the UAE and the region. A real passion for everything modified has spurred the growth of world-class distributors and installers, including Chrome and Carbon, Liberty Motor Sports, TAM, Lap57 and Extreme Performance. Well-known international companies are also setting up shop in the UAE. West Coast Customs has a showroom in Dubai, and Yellow Hat—a Japanese-based accessories chain—has signed an agreement to open five shops in the country. See SEMA's list of UAE distributors and installers.

Size of the Market

There are approximately 8.7 million vehicles in the Gulf region, with about 2.6 million vehicles registered in the UAE. The Dubai market represents about 45% of this total and Abu Dhabi accounts for another 30%. Market analyst Auto Strategies International estimates the number of cars in the road in the other GCC countries at 3.6 million in Saudi Arabia; 1.1 million in Kuwait; 352,000 in Qatar; 243,000 in Bahrain; and 793,000 in Oman.

Vehicle Mix

Slime was one of 50 SEMA-member companies exhibiting at the Automechanika Middle East Show recently held in Dubai.

Zlatko Mulabegovic of Top Performance magazine took note of the number of light trucks on the road, commenting that the UAE market is similar to the one in the U.S. but is significantly smaller. It is also heavily influenced by aftermarket trends in the United States, and Mulabegovic estimated that at least 25% of the customized vehicles in the UAE are SUVs or light pickups.

“SUVs dominated alongside foreign compacts like Mitsubishi, Honda and Toyota,” said Mike Robleto of U.S.-based Motor Media.

Mulabegovic identified other top modified vehicles that included the Honda Civic, the Mitsubishi EVO, the Ford Mustang and the Nissan 350Z and Patrol.

Robleto said that one of the highlights of his visit was a trip to Dubai-based TAM Automotive.

“TAM Automotive is an over-the-top impressive tuning shop that modified sport compacts but also a slew of high-end Euros and hot rods like an AC Cobra and a ’60s Corvette Stingray,” he said. “This amazing facility has a four-wheel dyno and maintains two race teams that compete in the local road course championship series. An engine-building room and a bustling crew of mechanics solidified the UAE’s seriousness about aftermarket performance.”

Quality and Brand Awareness

The SEMA delegation visited Dubai-based TAM Automotive. The shop houses a state-of-the-art dyno and is currently working on a dizzying array of vehicles, including sport compacts and American hot rods as well as a host of Japanese and high-end European vehicles.

“When business gets more challenging, that is the time to get more aggressive in procuring new customers,” said Jeff Victor of Treatment Products. “Our goal was to sign new distributors in previously untapped markets. Although we do currently sell our products to the major Middle East markets, such as the UAE and Saudi Arabia, there are still many other markets in the region that are clamoring for U.S. products. Markets such as Qatar, Oman, Bahrain and Kuwait are all very receptive to U.S. goods and are good places for U.S. companies to do business.”

Tariff Levels

The UAE has one of the most open economies in the world. Tariff levels are low—up to 5% on manufactured goods—and the liberal use of free-trade zones (which offer 100% foreign ownership and zero taxes throughout the UAE) has further reduced the costs of doing business in the region. The U.S. and UAE governments have begun talks on a tariff-free arrangement between the two countries, and free-trade agreements exist with two other countries in the Gulf region—Bahrain and Oman

Buying Power

With a per-capita income (on a purchasing parity basis) of U.S. $55,000 compared to U.S. $46,000 in the U.S., the UAE offers a significant number of buyers who are in a position to purchase specialty- automotive products—and do. A unique characteristic of the specialty-equipment market in the UAE is its combination of passion and good buying power.

The industry in the UAE started much like it did in the United States. Look at Abdulla Al Zaabi of Extreme Performance. Al Zaabi’s business grew out of his personal interest in drag racing. “The origin of the company was when I used to race my old four-cylinder Mitsubishi Turbo at the drag strip back in 2002. I realized that I couldn’t find a decent shop which could take care of my own performance upgrades. The result is a thriving company which is a leader in modifying SUVs (particularly Jeeps) and sport vehicles.” Abdulla shares the credit for this firm “It’s combining Sheikh Abdulla’s[Sheikh Abdulla Bin Mohammed Bin Butti Al Hamed] vision, my experience in the performance and tuning industry and the guys in the shop.”

Challenges

Drag racing in Umm Al Quwain. (Photo courtesy of Top Performance magazine)

One of the goals for the SEMA trip was to talk to local industry and government leaders about the size of the market, the important role the industry plays in the U.S. and to gain a better understanding about the legal environment in the GCC as well as the UAE. SEMA had fruitful discussions with local industry and government leaders, which afforded the opportunity to discuss the legal environment, markets and trends in both countries.

“We found the UAE and Dubai government officials very welcoming to SEMA’s input as they begin to contemplate a regulatory framework addressing the specialty-equipment industry,” reflected SEMA CEO and President Chris Kersting. “U.S.-type regulations would fit well in the UAE. The country already has developed into a key gateway to the region with its low tariffs, free trade zones and tradition of allowing products which conform to overseas safety and emissions requirements to be sold in the UAE.”

The global economic crisis presents another challenge affecting the UAE. The credit crunch, job layoffs and uncertainties are present in this part of the world, and while the sale of luxury vehicles and the products to accessorize them continues nearly unabated, there has been a slowdown in sales to the non-Emirati buyer. Non-UAE citizens (85% of the population in Dubai) present the greatest potential for growth. According to analyst Business Monitor International (BMI), Emirati households own 2.35 vehicles per family on average. BMI reported that European, North Americans and East Asian expatriate (11%) as well as non-Emirati Arabs (21%) provide market potential. While sales growth has been temporarily dampened by the financial crisis, this presents another niche opportunity for SEMA members.

As in the U.S., education is an important component in growing the UAE market. Greater knowledge among enthusiasts as well as those who install and sell specialty products will improve safety as brand-name quality products coupled with installation by knowledgeable technicians help grow the market. This is an important task of industry said Mohammed Al-Bannai, manager of tuning shop Lap57, noting that the industry should pull together for the common purpose of educating not only the public but also tuners about their products.

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies,” Cozzie said. “There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for. It is evident from observations at the street level that this is a market waiting to be serviced. I have always said that car guys are car guys no matter where one travels in the world, and the Gulf region is no different. There is a passion for all types of vehicles there along with a growing community of racing competitors and a thirst for the ability to accessorize and customize one’s ride. And the timing couldn’t be better for exploring this growing market.”

Concluded SEMA Vice President of Events and Communications Peter MacGillivray: “This market is a tangible example that there are opportunities in the world when the domestic market is down, and it underscores the importance for all of our members to seek out overseas customers.”

SEMA News - August 2009

By Linda Spencer

Gateway to the Middle East

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies. There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for,” said Jim Cozzie, SEMA Board of Directors Immediate Past Chairman.

Of that number, said organizer Epoc Messe Frankfurt GmbH, 46% were international visitors who had converged on Dubai from 114 countries.

“The United Arab Emirates (UAE) and the Gulf region are very important markets for Evosport, as they represent a growing percentage of our business,” said Simon Atik about his retail and wholesale accessory sales company based in Huntington Beach, California. “It’s also a very exciting time, as the potential for the specialized aftermarket is immense, albeit in its infancy stages. The entire Gulf region is exploding with potential buyers, and there is an overwhelming demand for quality products.”

Bob Scheid of Perry, Ohio-based Fidanza Engineering Corp. was also among the visiting SEMA contingent and agreed that the UAE represents a real opportunity.

“We like to believe that Americans love their cars and this hobby more than anything else,” he said. “I really think we have some competition with what I saw. Not only is there passion, but they have the disposable income to spend. The markets are so similar in that they want good quality parts. The market in Dubai is not only the same, but they are willing to pay much more for quality. In the U.S., we love to customize, but there they want to do whatever it takes to make sure that their car is like no other on the road. If you pull up to a light and see two Corvettes, they will almost certainly be built totally differently. Uniqueness is not a goal; it’s mandatory.”

SEMA Immediate Past Chairman Jim Cozzie noted that SEMA traveled to the region to determine the viability of the market and identify the opportunities as well as hurdles regarding entry to the marketplace for member companies.

SEMA Board of Directors Immediate Past Chairman Jim Cozzie (left) and SEMA CEO and President Chris Kersting answered questions on car modification regulations at a seminar during Automechanika Middle East.

The UAE is a federation of seven emirates, including the capital, Abu Dhabi, as well as Dubai. Founded in 1971, this small but wealthy nation has a population of 4.7 million. The UAE borders Saudi Arabia and Oman and serves as the gateway to the other members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman. A significant percentage of products are shipped to Abu Dhabi or Dubai and then re-shipped to other GCC or middle Eastern countries.

The specialty-equipment market is quite new to the UAE and the region. A real passion for everything modified has spurred the growth of world-class distributors and installers, including Chrome and Carbon, Liberty Motor Sports, TAM, Lap57 and Extreme Performance. Well-known international companies are also setting up shop in the UAE. West Coast Customs has a showroom in Dubai, and Yellow Hat—a Japanese-based accessories chain—has signed an agreement to open five shops in the country. See SEMA's list of UAE distributors and installers.

Size of the Market

There are approximately 8.7 million vehicles in the Gulf region, with about 2.6 million vehicles registered in the UAE. The Dubai market represents about 45% of this total and Abu Dhabi accounts for another 30%. Market analyst Auto Strategies International estimates the number of cars in the road in the other GCC countries at 3.6 million in Saudi Arabia; 1.1 million in Kuwait; 352,000 in Qatar; 243,000 in Bahrain; and 793,000 in Oman.

Vehicle Mix

Slime was one of 50 SEMA-member companies exhibiting at the Automechanika Middle East Show recently held in Dubai.

Zlatko Mulabegovic of Top Performance magazine took note of the number of light trucks on the road, commenting that the UAE market is similar to the one in the U.S. but is significantly smaller. It is also heavily influenced by aftermarket trends in the United States, and Mulabegovic estimated that at least 25% of the customized vehicles in the UAE are SUVs or light pickups.

“SUVs dominated alongside foreign compacts like Mitsubishi, Honda and Toyota,” said Mike Robleto of U.S.-based Motor Media.

Mulabegovic identified other top modified vehicles that included the Honda Civic, the Mitsubishi EVO, the Ford Mustang and the Nissan 350Z and Patrol.

Robleto said that one of the highlights of his visit was a trip to Dubai-based TAM Automotive.

“TAM Automotive is an over-the-top impressive tuning shop that modified sport compacts but also a slew of high-end Euros and hot rods like an AC Cobra and a ’60s Corvette Stingray,” he said. “This amazing facility has a four-wheel dyno and maintains two race teams that compete in the local road course championship series. An engine-building room and a bustling crew of mechanics solidified the UAE’s seriousness about aftermarket performance.”

Quality and Brand Awareness

The SEMA delegation visited Dubai-based TAM Automotive. The shop houses a state-of-the-art dyno and is currently working on a dizzying array of vehicles, including sport compacts and American hot rods as well as a host of Japanese and high-end European vehicles.

“When business gets more challenging, that is the time to get more aggressive in procuring new customers,” said Jeff Victor of Treatment Products. “Our goal was to sign new distributors in previously untapped markets. Although we do currently sell our products to the major Middle East markets, such as the UAE and Saudi Arabia, there are still many other markets in the region that are clamoring for U.S. products. Markets such as Qatar, Oman, Bahrain and Kuwait are all very receptive to U.S. goods and are good places for U.S. companies to do business.”

Tariff Levels

The UAE has one of the most open economies in the world. Tariff levels are low—up to 5% on manufactured goods—and the liberal use of free-trade zones (which offer 100% foreign ownership and zero taxes throughout the UAE) has further reduced the costs of doing business in the region. The U.S. and UAE governments have begun talks on a tariff-free arrangement between the two countries, and free-trade agreements exist with two other countries in the Gulf region—Bahrain and Oman

Buying Power

With a per-capita income (on a purchasing parity basis) of U.S. $55,000 compared to U.S. $46,000 in the U.S., the UAE offers a significant number of buyers who are in a position to purchase specialty- automotive products—and do. A unique characteristic of the specialty-equipment market in the UAE is its combination of passion and good buying power.

The industry in the UAE started much like it did in the United States. Look at Abdulla Al Zaabi of Extreme Performance. Al Zaabi’s business grew out of his personal interest in drag racing. “The origin of the company was when I used to race my old four-cylinder Mitsubishi Turbo at the drag strip back in 2002. I realized that I couldn’t find a decent shop which could take care of my own performance upgrades. The result is a thriving company which is a leader in modifying SUVs (particularly Jeeps) and sport vehicles.” Abdulla shares the credit for this firm “It’s combining Sheikh Abdulla’s[Sheikh Abdulla Bin Mohammed Bin Butti Al Hamed] vision, my experience in the performance and tuning industry and the guys in the shop.”

Challenges

Drag racing in Umm Al Quwain. (Photo courtesy of Top Performance magazine)

One of the goals for the SEMA trip was to talk to local industry and government leaders about the size of the market, the important role the industry plays in the U.S. and to gain a better understanding about the legal environment in the GCC as well as the UAE. SEMA had fruitful discussions with local industry and government leaders, which afforded the opportunity to discuss the legal environment, markets and trends in both countries.

“We found the UAE and Dubai government officials very welcoming to SEMA’s input as they begin to contemplate a regulatory framework addressing the specialty-equipment industry,” reflected SEMA CEO and President Chris Kersting. “U.S.-type regulations would fit well in the UAE. The country already has developed into a key gateway to the region with its low tariffs, free trade zones and tradition of allowing products which conform to overseas safety and emissions requirements to be sold in the UAE.”

The global economic crisis presents another challenge affecting the UAE. The credit crunch, job layoffs and uncertainties are present in this part of the world, and while the sale of luxury vehicles and the products to accessorize them continues nearly unabated, there has been a slowdown in sales to the non-Emirati buyer. Non-UAE citizens (85% of the population in Dubai) present the greatest potential for growth. According to analyst Business Monitor International (BMI), Emirati households own 2.35 vehicles per family on average. BMI reported that European, North Americans and East Asian expatriate (11%) as well as non-Emirati Arabs (21%) provide market potential. While sales growth has been temporarily dampened by the financial crisis, this presents another niche opportunity for SEMA members.

As in the U.S., education is an important component in growing the UAE market. Greater knowledge among enthusiasts as well as those who install and sell specialty products will improve safety as brand-name quality products coupled with installation by knowledgeable technicians help grow the market. This is an important task of industry said Mohammed Al-Bannai, manager of tuning shop Lap57, noting that the industry should pull together for the common purpose of educating not only the public but also tuners about their products.

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies,” Cozzie said. “There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for. It is evident from observations at the street level that this is a market waiting to be serviced. I have always said that car guys are car guys no matter where one travels in the world, and the Gulf region is no different. There is a passion for all types of vehicles there along with a growing community of racing competitors and a thirst for the ability to accessorize and customize one’s ride. And the timing couldn’t be better for exploring this growing market.”

Concluded SEMA Vice President of Events and Communications Peter MacGillivray: “This market is a tangible example that there are opportunities in the world when the domestic market is down, and it underscores the importance for all of our members to seek out overseas customers.”

SEMA News - August 2009

By Linda Spencer

Gateway to the Middle East

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies. There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for,” said Jim Cozzie, SEMA Board of Directors Immediate Past Chairman.

Of that number, said organizer Epoc Messe Frankfurt GmbH, 46% were international visitors who had converged on Dubai from 114 countries.

“The United Arab Emirates (UAE) and the Gulf region are very important markets for Evosport, as they represent a growing percentage of our business,” said Simon Atik about his retail and wholesale accessory sales company based in Huntington Beach, California. “It’s also a very exciting time, as the potential for the specialized aftermarket is immense, albeit in its infancy stages. The entire Gulf region is exploding with potential buyers, and there is an overwhelming demand for quality products.”

Bob Scheid of Perry, Ohio-based Fidanza Engineering Corp. was also among the visiting SEMA contingent and agreed that the UAE represents a real opportunity.

“We like to believe that Americans love their cars and this hobby more than anything else,” he said. “I really think we have some competition with what I saw. Not only is there passion, but they have the disposable income to spend. The markets are so similar in that they want good quality parts. The market in Dubai is not only the same, but they are willing to pay much more for quality. In the U.S., we love to customize, but there they want to do whatever it takes to make sure that their car is like no other on the road. If you pull up to a light and see two Corvettes, they will almost certainly be built totally differently. Uniqueness is not a goal; it’s mandatory.”

SEMA Immediate Past Chairman Jim Cozzie noted that SEMA traveled to the region to determine the viability of the market and identify the opportunities as well as hurdles regarding entry to the marketplace for member companies.

SEMA Board of Directors Immediate Past Chairman Jim Cozzie (left) and SEMA CEO and President Chris Kersting answered questions on car modification regulations at a seminar during Automechanika Middle East.

The UAE is a federation of seven emirates, including the capital, Abu Dhabi, as well as Dubai. Founded in 1971, this small but wealthy nation has a population of 4.7 million. The UAE borders Saudi Arabia and Oman and serves as the gateway to the other members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman. A significant percentage of products are shipped to Abu Dhabi or Dubai and then re-shipped to other GCC or middle Eastern countries.

The specialty-equipment market is quite new to the UAE and the region. A real passion for everything modified has spurred the growth of world-class distributors and installers, including Chrome and Carbon, Liberty Motor Sports, TAM, Lap57 and Extreme Performance. Well-known international companies are also setting up shop in the UAE. West Coast Customs has a showroom in Dubai, and Yellow Hat—a Japanese-based accessories chain—has signed an agreement to open five shops in the country. See SEMA's list of UAE distributors and installers.

Size of the Market

There are approximately 8.7 million vehicles in the Gulf region, with about 2.6 million vehicles registered in the UAE. The Dubai market represents about 45% of this total and Abu Dhabi accounts for another 30%. Market analyst Auto Strategies International estimates the number of cars in the road in the other GCC countries at 3.6 million in Saudi Arabia; 1.1 million in Kuwait; 352,000 in Qatar; 243,000 in Bahrain; and 793,000 in Oman.

Vehicle Mix

Slime was one of 50 SEMA-member companies exhibiting at the Automechanika Middle East Show recently held in Dubai.

Zlatko Mulabegovic of Top Performance magazine took note of the number of light trucks on the road, commenting that the UAE market is similar to the one in the U.S. but is significantly smaller. It is also heavily influenced by aftermarket trends in the United States, and Mulabegovic estimated that at least 25% of the customized vehicles in the UAE are SUVs or light pickups.

“SUVs dominated alongside foreign compacts like Mitsubishi, Honda and Toyota,” said Mike Robleto of U.S.-based Motor Media.

Mulabegovic identified other top modified vehicles that included the Honda Civic, the Mitsubishi EVO, the Ford Mustang and the Nissan 350Z and Patrol.

Robleto said that one of the highlights of his visit was a trip to Dubai-based TAM Automotive.

“TAM Automotive is an over-the-top impressive tuning shop that modified sport compacts but also a slew of high-end Euros and hot rods like an AC Cobra and a ’60s Corvette Stingray,” he said. “This amazing facility has a four-wheel dyno and maintains two race teams that compete in the local road course championship series. An engine-building room and a bustling crew of mechanics solidified the UAE’s seriousness about aftermarket performance.”

Quality and Brand Awareness

The SEMA delegation visited Dubai-based TAM Automotive. The shop houses a state-of-the-art dyno and is currently working on a dizzying array of vehicles, including sport compacts and American hot rods as well as a host of Japanese and high-end European vehicles.

“When business gets more challenging, that is the time to get more aggressive in procuring new customers,” said Jeff Victor of Treatment Products. “Our goal was to sign new distributors in previously untapped markets. Although we do currently sell our products to the major Middle East markets, such as the UAE and Saudi Arabia, there are still many other markets in the region that are clamoring for U.S. products. Markets such as Qatar, Oman, Bahrain and Kuwait are all very receptive to U.S. goods and are good places for U.S. companies to do business.”

Tariff Levels

The UAE has one of the most open economies in the world. Tariff levels are low—up to 5% on manufactured goods—and the liberal use of free-trade zones (which offer 100% foreign ownership and zero taxes throughout the UAE) has further reduced the costs of doing business in the region. The U.S. and UAE governments have begun talks on a tariff-free arrangement between the two countries, and free-trade agreements exist with two other countries in the Gulf region—Bahrain and Oman

Buying Power

With a per-capita income (on a purchasing parity basis) of U.S. $55,000 compared to U.S. $46,000 in the U.S., the UAE offers a significant number of buyers who are in a position to purchase specialty- automotive products—and do. A unique characteristic of the specialty-equipment market in the UAE is its combination of passion and good buying power.

The industry in the UAE started much like it did in the United States. Look at Abdulla Al Zaabi of Extreme Performance. Al Zaabi’s business grew out of his personal interest in drag racing. “The origin of the company was when I used to race my old four-cylinder Mitsubishi Turbo at the drag strip back in 2002. I realized that I couldn’t find a decent shop which could take care of my own performance upgrades. The result is a thriving company which is a leader in modifying SUVs (particularly Jeeps) and sport vehicles.” Abdulla shares the credit for this firm “It’s combining Sheikh Abdulla’s[Sheikh Abdulla Bin Mohammed Bin Butti Al Hamed] vision, my experience in the performance and tuning industry and the guys in the shop.”

Challenges

Drag racing in Umm Al Quwain. (Photo courtesy of Top Performance magazine)

One of the goals for the SEMA trip was to talk to local industry and government leaders about the size of the market, the important role the industry plays in the U.S. and to gain a better understanding about the legal environment in the GCC as well as the UAE. SEMA had fruitful discussions with local industry and government leaders, which afforded the opportunity to discuss the legal environment, markets and trends in both countries.

“We found the UAE and Dubai government officials very welcoming to SEMA’s input as they begin to contemplate a regulatory framework addressing the specialty-equipment industry,” reflected SEMA CEO and President Chris Kersting. “U.S.-type regulations would fit well in the UAE. The country already has developed into a key gateway to the region with its low tariffs, free trade zones and tradition of allowing products which conform to overseas safety and emissions requirements to be sold in the UAE.”

The global economic crisis presents another challenge affecting the UAE. The credit crunch, job layoffs and uncertainties are present in this part of the world, and while the sale of luxury vehicles and the products to accessorize them continues nearly unabated, there has been a slowdown in sales to the non-Emirati buyer. Non-UAE citizens (85% of the population in Dubai) present the greatest potential for growth. According to analyst Business Monitor International (BMI), Emirati households own 2.35 vehicles per family on average. BMI reported that European, North Americans and East Asian expatriate (11%) as well as non-Emirati Arabs (21%) provide market potential. While sales growth has been temporarily dampened by the financial crisis, this presents another niche opportunity for SEMA members.

As in the U.S., education is an important component in growing the UAE market. Greater knowledge among enthusiasts as well as those who install and sell specialty products will improve safety as brand-name quality products coupled with installation by knowledgeable technicians help grow the market. This is an important task of industry said Mohammed Al-Bannai, manager of tuning shop Lap57, noting that the industry should pull together for the common purpose of educating not only the public but also tuners about their products.

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies,” Cozzie said. “There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for. It is evident from observations at the street level that this is a market waiting to be serviced. I have always said that car guys are car guys no matter where one travels in the world, and the Gulf region is no different. There is a passion for all types of vehicles there along with a growing community of racing competitors and a thirst for the ability to accessorize and customize one’s ride. And the timing couldn’t be better for exploring this growing market.”

Concluded SEMA Vice President of Events and Communications Peter MacGillivray: “This market is a tangible example that there are opportunities in the world when the domestic market is down, and it underscores the importance for all of our members to seek out overseas customers.”

SEMA News - August 2009

By Linda Spencer

Gateway to the Middle East

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies. There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for,” said Jim Cozzie, SEMA Board of Directors Immediate Past Chairman.

Of that number, said organizer Epoc Messe Frankfurt GmbH, 46% were international visitors who had converged on Dubai from 114 countries.

“The United Arab Emirates (UAE) and the Gulf region are very important markets for Evosport, as they represent a growing percentage of our business,” said Simon Atik about his retail and wholesale accessory sales company based in Huntington Beach, California. “It’s also a very exciting time, as the potential for the specialized aftermarket is immense, albeit in its infancy stages. The entire Gulf region is exploding with potential buyers, and there is an overwhelming demand for quality products.”

Bob Scheid of Perry, Ohio-based Fidanza Engineering Corp. was also among the visiting SEMA contingent and agreed that the UAE represents a real opportunity.

“We like to believe that Americans love their cars and this hobby more than anything else,” he said. “I really think we have some competition with what I saw. Not only is there passion, but they have the disposable income to spend. The markets are so similar in that they want good quality parts. The market in Dubai is not only the same, but they are willing to pay much more for quality. In the U.S., we love to customize, but there they want to do whatever it takes to make sure that their car is like no other on the road. If you pull up to a light and see two Corvettes, they will almost certainly be built totally differently. Uniqueness is not a goal; it’s mandatory.”

SEMA Immediate Past Chairman Jim Cozzie noted that SEMA traveled to the region to determine the viability of the market and identify the opportunities as well as hurdles regarding entry to the marketplace for member companies.

SEMA Board of Directors Immediate Past Chairman Jim Cozzie (left) and SEMA CEO and President Chris Kersting answered questions on car modification regulations at a seminar during Automechanika Middle East.

The UAE is a federation of seven emirates, including the capital, Abu Dhabi, as well as Dubai. Founded in 1971, this small but wealthy nation has a population of 4.7 million. The UAE borders Saudi Arabia and Oman and serves as the gateway to the other members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman. A significant percentage of products are shipped to Abu Dhabi or Dubai and then re-shipped to other GCC or middle Eastern countries.

The specialty-equipment market is quite new to the UAE and the region. A real passion for everything modified has spurred the growth of world-class distributors and installers, including Chrome and Carbon, Liberty Motor Sports, TAM, Lap57 and Extreme Performance. Well-known international companies are also setting up shop in the UAE. West Coast Customs has a showroom in Dubai, and Yellow Hat—a Japanese-based accessories chain—has signed an agreement to open five shops in the country. See SEMA's list of UAE distributors and installers.

Size of the Market

There are approximately 8.7 million vehicles in the Gulf region, with about 2.6 million vehicles registered in the UAE. The Dubai market represents about 45% of this total and Abu Dhabi accounts for another 30%. Market analyst Auto Strategies International estimates the number of cars in the road in the other GCC countries at 3.6 million in Saudi Arabia; 1.1 million in Kuwait; 352,000 in Qatar; 243,000 in Bahrain; and 793,000 in Oman.

Vehicle Mix

Slime was one of 50 SEMA-member companies exhibiting at the Automechanika Middle East Show recently held in Dubai.

Zlatko Mulabegovic of Top Performance magazine took note of the number of light trucks on the road, commenting that the UAE market is similar to the one in the U.S. but is significantly smaller. It is also heavily influenced by aftermarket trends in the United States, and Mulabegovic estimated that at least 25% of the customized vehicles in the UAE are SUVs or light pickups.

“SUVs dominated alongside foreign compacts like Mitsubishi, Honda and Toyota,” said Mike Robleto of U.S.-based Motor Media.

Mulabegovic identified other top modified vehicles that included the Honda Civic, the Mitsubishi EVO, the Ford Mustang and the Nissan 350Z and Patrol.

Robleto said that one of the highlights of his visit was a trip to Dubai-based TAM Automotive.

“TAM Automotive is an over-the-top impressive tuning shop that modified sport compacts but also a slew of high-end Euros and hot rods like an AC Cobra and a ’60s Corvette Stingray,” he said. “This amazing facility has a four-wheel dyno and maintains two race teams that compete in the local road course championship series. An engine-building room and a bustling crew of mechanics solidified the UAE’s seriousness about aftermarket performance.”

Quality and Brand Awareness

The SEMA delegation visited Dubai-based TAM Automotive. The shop houses a state-of-the-art dyno and is currently working on a dizzying array of vehicles, including sport compacts and American hot rods as well as a host of Japanese and high-end European vehicles.

“When business gets more challenging, that is the time to get more aggressive in procuring new customers,” said Jeff Victor of Treatment Products. “Our goal was to sign new distributors in previously untapped markets. Although we do currently sell our products to the major Middle East markets, such as the UAE and Saudi Arabia, there are still many other markets in the region that are clamoring for U.S. products. Markets such as Qatar, Oman, Bahrain and Kuwait are all very receptive to U.S. goods and are good places for U.S. companies to do business.”

Tariff Levels

The UAE has one of the most open economies in the world. Tariff levels are low—up to 5% on manufactured goods—and the liberal use of free-trade zones (which offer 100% foreign ownership and zero taxes throughout the UAE) has further reduced the costs of doing business in the region. The U.S. and UAE governments have begun talks on a tariff-free arrangement between the two countries, and free-trade agreements exist with two other countries in the Gulf region—Bahrain and Oman

Buying Power

With a per-capita income (on a purchasing parity basis) of U.S. $55,000 compared to U.S. $46,000 in the U.S., the UAE offers a significant number of buyers who are in a position to purchase specialty- automotive products—and do. A unique characteristic of the specialty-equipment market in the UAE is its combination of passion and good buying power.

The industry in the UAE started much like it did in the United States. Look at Abdulla Al Zaabi of Extreme Performance. Al Zaabi’s business grew out of his personal interest in drag racing. “The origin of the company was when I used to race my old four-cylinder Mitsubishi Turbo at the drag strip back in 2002. I realized that I couldn’t find a decent shop which could take care of my own performance upgrades. The result is a thriving company which is a leader in modifying SUVs (particularly Jeeps) and sport vehicles.” Abdulla shares the credit for this firm “It’s combining Sheikh Abdulla’s[Sheikh Abdulla Bin Mohammed Bin Butti Al Hamed] vision, my experience in the performance and tuning industry and the guys in the shop.”

Challenges

Drag racing in Umm Al Quwain. (Photo courtesy of Top Performance magazine)

One of the goals for the SEMA trip was to talk to local industry and government leaders about the size of the market, the important role the industry plays in the U.S. and to gain a better understanding about the legal environment in the GCC as well as the UAE. SEMA had fruitful discussions with local industry and government leaders, which afforded the opportunity to discuss the legal environment, markets and trends in both countries.

“We found the UAE and Dubai government officials very welcoming to SEMA’s input as they begin to contemplate a regulatory framework addressing the specialty-equipment industry,” reflected SEMA CEO and President Chris Kersting. “U.S.-type regulations would fit well in the UAE. The country already has developed into a key gateway to the region with its low tariffs, free trade zones and tradition of allowing products which conform to overseas safety and emissions requirements to be sold in the UAE.”

The global economic crisis presents another challenge affecting the UAE. The credit crunch, job layoffs and uncertainties are present in this part of the world, and while the sale of luxury vehicles and the products to accessorize them continues nearly unabated, there has been a slowdown in sales to the non-Emirati buyer. Non-UAE citizens (85% of the population in Dubai) present the greatest potential for growth. According to analyst Business Monitor International (BMI), Emirati households own 2.35 vehicles per family on average. BMI reported that European, North Americans and East Asian expatriate (11%) as well as non-Emirati Arabs (21%) provide market potential. While sales growth has been temporarily dampened by the financial crisis, this presents another niche opportunity for SEMA members.

As in the U.S., education is an important component in growing the UAE market. Greater knowledge among enthusiasts as well as those who install and sell specialty products will improve safety as brand-name quality products coupled with installation by knowledgeable technicians help grow the market. This is an important task of industry said Mohammed Al-Bannai, manager of tuning shop Lap57, noting that the industry should pull together for the common purpose of educating not only the public but also tuners about their products.

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies,” Cozzie said. “There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for. It is evident from observations at the street level that this is a market waiting to be serviced. I have always said that car guys are car guys no matter where one travels in the world, and the Gulf region is no different. There is a passion for all types of vehicles there along with a growing community of racing competitors and a thirst for the ability to accessorize and customize one’s ride. And the timing couldn’t be better for exploring this growing market.”

Concluded SEMA Vice President of Events and Communications Peter MacGillivray: “This market is a tangible example that there are opportunities in the world when the domestic market is down, and it underscores the importance for all of our members to seek out overseas customers.”

SEMA News - August 2009

By Linda Spencer

Gateway to the Middle East

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies. There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for,” said Jim Cozzie, SEMA Board of Directors Immediate Past Chairman.

Of that number, said organizer Epoc Messe Frankfurt GmbH, 46% were international visitors who had converged on Dubai from 114 countries.

“The United Arab Emirates (UAE) and the Gulf region are very important markets for Evosport, as they represent a growing percentage of our business,” said Simon Atik about his retail and wholesale accessory sales company based in Huntington Beach, California. “It’s also a very exciting time, as the potential for the specialized aftermarket is immense, albeit in its infancy stages. The entire Gulf region is exploding with potential buyers, and there is an overwhelming demand for quality products.”

Bob Scheid of Perry, Ohio-based Fidanza Engineering Corp. was also among the visiting SEMA contingent and agreed that the UAE represents a real opportunity.

“We like to believe that Americans love their cars and this hobby more than anything else,” he said. “I really think we have some competition with what I saw. Not only is there passion, but they have the disposable income to spend. The markets are so similar in that they want good quality parts. The market in Dubai is not only the same, but they are willing to pay much more for quality. In the U.S., we love to customize, but there they want to do whatever it takes to make sure that their car is like no other on the road. If you pull up to a light and see two Corvettes, they will almost certainly be built totally differently. Uniqueness is not a goal; it’s mandatory.”

SEMA Immediate Past Chairman Jim Cozzie noted that SEMA traveled to the region to determine the viability of the market and identify the opportunities as well as hurdles regarding entry to the marketplace for member companies.

SEMA Board of Directors Immediate Past Chairman Jim Cozzie (left) and SEMA CEO and President Chris Kersting answered questions on car modification regulations at a seminar during Automechanika Middle East.

The UAE is a federation of seven emirates, including the capital, Abu Dhabi, as well as Dubai. Founded in 1971, this small but wealthy nation has a population of 4.7 million. The UAE borders Saudi Arabia and Oman and serves as the gateway to the other members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman. A significant percentage of products are shipped to Abu Dhabi or Dubai and then re-shipped to other GCC or middle Eastern countries.

The specialty-equipment market is quite new to the UAE and the region. A real passion for everything modified has spurred the growth of world-class distributors and installers, including Chrome and Carbon, Liberty Motor Sports, TAM, Lap57 and Extreme Performance. Well-known international companies are also setting up shop in the UAE. West Coast Customs has a showroom in Dubai, and Yellow Hat—a Japanese-based accessories chain—has signed an agreement to open five shops in the country. See SEMA's list of UAE distributors and installers.

Size of the Market

There are approximately 8.7 million vehicles in the Gulf region, with about 2.6 million vehicles registered in the UAE. The Dubai market represents about 45% of this total and Abu Dhabi accounts for another 30%. Market analyst Auto Strategies International estimates the number of cars in the road in the other GCC countries at 3.6 million in Saudi Arabia; 1.1 million in Kuwait; 352,000 in Qatar; 243,000 in Bahrain; and 793,000 in Oman.

Vehicle Mix

Slime was one of 50 SEMA-member companies exhibiting at the Automechanika Middle East Show recently held in Dubai.

Zlatko Mulabegovic of Top Performance magazine took note of the number of light trucks on the road, commenting that the UAE market is similar to the one in the U.S. but is significantly smaller. It is also heavily influenced by aftermarket trends in the United States, and Mulabegovic estimated that at least 25% of the customized vehicles in the UAE are SUVs or light pickups.

“SUVs dominated alongside foreign compacts like Mitsubishi, Honda and Toyota,” said Mike Robleto of U.S.-based Motor Media.

Mulabegovic identified other top modified vehicles that included the Honda Civic, the Mitsubishi EVO, the Ford Mustang and the Nissan 350Z and Patrol.

Robleto said that one of the highlights of his visit was a trip to Dubai-based TAM Automotive.

“TAM Automotive is an over-the-top impressive tuning shop that modified sport compacts but also a slew of high-end Euros and hot rods like an AC Cobra and a ’60s Corvette Stingray,” he said. “This amazing facility has a four-wheel dyno and maintains two race teams that compete in the local road course championship series. An engine-building room and a bustling crew of mechanics solidified the UAE’s seriousness about aftermarket performance.”

Quality and Brand Awareness

The SEMA delegation visited Dubai-based TAM Automotive. The shop houses a state-of-the-art dyno and is currently working on a dizzying array of vehicles, including sport compacts and American hot rods as well as a host of Japanese and high-end European vehicles.

“When business gets more challenging, that is the time to get more aggressive in procuring new customers,” said Jeff Victor of Treatment Products. “Our goal was to sign new distributors in previously untapped markets. Although we do currently sell our products to the major Middle East markets, such as the UAE and Saudi Arabia, there are still many other markets in the region that are clamoring for U.S. products. Markets such as Qatar, Oman, Bahrain and Kuwait are all very receptive to U.S. goods and are good places for U.S. companies to do business.”

Tariff Levels

The UAE has one of the most open economies in the world. Tariff levels are low—up to 5% on manufactured goods—and the liberal use of free-trade zones (which offer 100% foreign ownership and zero taxes throughout the UAE) has further reduced the costs of doing business in the region. The U.S. and UAE governments have begun talks on a tariff-free arrangement between the two countries, and free-trade agreements exist with two other countries in the Gulf region—Bahrain and Oman

Buying Power

With a per-capita income (on a purchasing parity basis) of U.S. $55,000 compared to U.S. $46,000 in the U.S., the UAE offers a significant number of buyers who are in a position to purchase specialty- automotive products—and do. A unique characteristic of the specialty-equipment market in the UAE is its combination of passion and good buying power.

The industry in the UAE started much like it did in the United States. Look at Abdulla Al Zaabi of Extreme Performance. Al Zaabi’s business grew out of his personal interest in drag racing. “The origin of the company was when I used to race my old four-cylinder Mitsubishi Turbo at the drag strip back in 2002. I realized that I couldn’t find a decent shop which could take care of my own performance upgrades. The result is a thriving company which is a leader in modifying SUVs (particularly Jeeps) and sport vehicles.” Abdulla shares the credit for this firm “It’s combining Sheikh Abdulla’s[Sheikh Abdulla Bin Mohammed Bin Butti Al Hamed] vision, my experience in the performance and tuning industry and the guys in the shop.”

Challenges

Drag racing in Umm Al Quwain. (Photo courtesy of Top Performance magazine)

One of the goals for the SEMA trip was to talk to local industry and government leaders about the size of the market, the important role the industry plays in the U.S. and to gain a better understanding about the legal environment in the GCC as well as the UAE. SEMA had fruitful discussions with local industry and government leaders, which afforded the opportunity to discuss the legal environment, markets and trends in both countries.

“We found the UAE and Dubai government officials very welcoming to SEMA’s input as they begin to contemplate a regulatory framework addressing the specialty-equipment industry,” reflected SEMA CEO and President Chris Kersting. “U.S.-type regulations would fit well in the UAE. The country already has developed into a key gateway to the region with its low tariffs, free trade zones and tradition of allowing products which conform to overseas safety and emissions requirements to be sold in the UAE.”

The global economic crisis presents another challenge affecting the UAE. The credit crunch, job layoffs and uncertainties are present in this part of the world, and while the sale of luxury vehicles and the products to accessorize them continues nearly unabated, there has been a slowdown in sales to the non-Emirati buyer. Non-UAE citizens (85% of the population in Dubai) present the greatest potential for growth. According to analyst Business Monitor International (BMI), Emirati households own 2.35 vehicles per family on average. BMI reported that European, North Americans and East Asian expatriate (11%) as well as non-Emirati Arabs (21%) provide market potential. While sales growth has been temporarily dampened by the financial crisis, this presents another niche opportunity for SEMA members.

As in the U.S., education is an important component in growing the UAE market. Greater knowledge among enthusiasts as well as those who install and sell specialty products will improve safety as brand-name quality products coupled with installation by knowledgeable technicians help grow the market. This is an important task of industry said Mohammed Al-Bannai, manager of tuning shop Lap57, noting that the industry should pull together for the common purpose of educating not only the public but also tuners about their products.

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies,” Cozzie said. “There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for. It is evident from observations at the street level that this is a market waiting to be serviced. I have always said that car guys are car guys no matter where one travels in the world, and the Gulf region is no different. There is a passion for all types of vehicles there along with a growing community of racing competitors and a thirst for the ability to accessorize and customize one’s ride. And the timing couldn’t be better for exploring this growing market.”

Concluded SEMA Vice President of Events and Communications Peter MacGillivray: “This market is a tangible example that there are opportunities in the world when the domestic market is down, and it underscores the importance for all of our members to seek out overseas customers.”

SEMA News - August 2009

By Linda Spencer

Gateway to the Middle East

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies. There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for,” said Jim Cozzie, SEMA Board of Directors Immediate Past Chairman.

Of that number, said organizer Epoc Messe Frankfurt GmbH, 46% were international visitors who had converged on Dubai from 114 countries.

“The United Arab Emirates (UAE) and the Gulf region are very important markets for Evosport, as they represent a growing percentage of our business,” said Simon Atik about his retail and wholesale accessory sales company based in Huntington Beach, California. “It’s also a very exciting time, as the potential for the specialized aftermarket is immense, albeit in its infancy stages. The entire Gulf region is exploding with potential buyers, and there is an overwhelming demand for quality products.”

Bob Scheid of Perry, Ohio-based Fidanza Engineering Corp. was also among the visiting SEMA contingent and agreed that the UAE represents a real opportunity.

“We like to believe that Americans love their cars and this hobby more than anything else,” he said. “I really think we have some competition with what I saw. Not only is there passion, but they have the disposable income to spend. The markets are so similar in that they want good quality parts. The market in Dubai is not only the same, but they are willing to pay much more for quality. In the U.S., we love to customize, but there they want to do whatever it takes to make sure that their car is like no other on the road. If you pull up to a light and see two Corvettes, they will almost certainly be built totally differently. Uniqueness is not a goal; it’s mandatory.”

SEMA Immediate Past Chairman Jim Cozzie noted that SEMA traveled to the region to determine the viability of the market and identify the opportunities as well as hurdles regarding entry to the marketplace for member companies.

SEMA Board of Directors Immediate Past Chairman Jim Cozzie (left) and SEMA CEO and President Chris Kersting answered questions on car modification regulations at a seminar during Automechanika Middle East.

The UAE is a federation of seven emirates, including the capital, Abu Dhabi, as well as Dubai. Founded in 1971, this small but wealthy nation has a population of 4.7 million. The UAE borders Saudi Arabia and Oman and serves as the gateway to the other members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman. A significant percentage of products are shipped to Abu Dhabi or Dubai and then re-shipped to other GCC or middle Eastern countries.

The specialty-equipment market is quite new to the UAE and the region. A real passion for everything modified has spurred the growth of world-class distributors and installers, including Chrome and Carbon, Liberty Motor Sports, TAM, Lap57 and Extreme Performance. Well-known international companies are also setting up shop in the UAE. West Coast Customs has a showroom in Dubai, and Yellow Hat—a Japanese-based accessories chain—has signed an agreement to open five shops in the country. See SEMA's list of UAE distributors and installers.

Size of the Market

There are approximately 8.7 million vehicles in the Gulf region, with about 2.6 million vehicles registered in the UAE. The Dubai market represents about 45% of this total and Abu Dhabi accounts for another 30%. Market analyst Auto Strategies International estimates the number of cars in the road in the other GCC countries at 3.6 million in Saudi Arabia; 1.1 million in Kuwait; 352,000 in Qatar; 243,000 in Bahrain; and 793,000 in Oman.

Vehicle Mix

Slime was one of 50 SEMA-member companies exhibiting at the Automechanika Middle East Show recently held in Dubai.

Zlatko Mulabegovic of Top Performance magazine took note of the number of light trucks on the road, commenting that the UAE market is similar to the one in the U.S. but is significantly smaller. It is also heavily influenced by aftermarket trends in the United States, and Mulabegovic estimated that at least 25% of the customized vehicles in the UAE are SUVs or light pickups.

“SUVs dominated alongside foreign compacts like Mitsubishi, Honda and Toyota,” said Mike Robleto of U.S.-based Motor Media.

Mulabegovic identified other top modified vehicles that included the Honda Civic, the Mitsubishi EVO, the Ford Mustang and the Nissan 350Z and Patrol.

Robleto said that one of the highlights of his visit was a trip to Dubai-based TAM Automotive.

“TAM Automotive is an over-the-top impressive tuning shop that modified sport compacts but also a slew of high-end Euros and hot rods like an AC Cobra and a ’60s Corvette Stingray,” he said. “This amazing facility has a four-wheel dyno and maintains two race teams that compete in the local road course championship series. An engine-building room and a bustling crew of mechanics solidified the UAE’s seriousness about aftermarket performance.”

Quality and Brand Awareness

The SEMA delegation visited Dubai-based TAM Automotive. The shop houses a state-of-the-art dyno and is currently working on a dizzying array of vehicles, including sport compacts and American hot rods as well as a host of Japanese and high-end European vehicles.

“When business gets more challenging, that is the time to get more aggressive in procuring new customers,” said Jeff Victor of Treatment Products. “Our goal was to sign new distributors in previously untapped markets. Although we do currently sell our products to the major Middle East markets, such as the UAE and Saudi Arabia, there are still many other markets in the region that are clamoring for U.S. products. Markets such as Qatar, Oman, Bahrain and Kuwait are all very receptive to U.S. goods and are good places for U.S. companies to do business.”

Tariff Levels

The UAE has one of the most open economies in the world. Tariff levels are low—up to 5% on manufactured goods—and the liberal use of free-trade zones (which offer 100% foreign ownership and zero taxes throughout the UAE) has further reduced the costs of doing business in the region. The U.S. and UAE governments have begun talks on a tariff-free arrangement between the two countries, and free-trade agreements exist with two other countries in the Gulf region—Bahrain and Oman

Buying Power

With a per-capita income (on a purchasing parity basis) of U.S. $55,000 compared to U.S. $46,000 in the U.S., the UAE offers a significant number of buyers who are in a position to purchase specialty- automotive products—and do. A unique characteristic of the specialty-equipment market in the UAE is its combination of passion and good buying power.

The industry in the UAE started much like it did in the United States. Look at Abdulla Al Zaabi of Extreme Performance. Al Zaabi’s business grew out of his personal interest in drag racing. “The origin of the company was when I used to race my old four-cylinder Mitsubishi Turbo at the drag strip back in 2002. I realized that I couldn’t find a decent shop which could take care of my own performance upgrades. The result is a thriving company which is a leader in modifying SUVs (particularly Jeeps) and sport vehicles.” Abdulla shares the credit for this firm “It’s combining Sheikh Abdulla’s[Sheikh Abdulla Bin Mohammed Bin Butti Al Hamed] vision, my experience in the performance and tuning industry and the guys in the shop.”

Challenges

Drag racing in Umm Al Quwain. (Photo courtesy of Top Performance magazine)

One of the goals for the SEMA trip was to talk to local industry and government leaders about the size of the market, the important role the industry plays in the U.S. and to gain a better understanding about the legal environment in the GCC as well as the UAE. SEMA had fruitful discussions with local industry and government leaders, which afforded the opportunity to discuss the legal environment, markets and trends in both countries.

“We found the UAE and Dubai government officials very welcoming to SEMA’s input as they begin to contemplate a regulatory framework addressing the specialty-equipment industry,” reflected SEMA CEO and President Chris Kersting. “U.S.-type regulations would fit well in the UAE. The country already has developed into a key gateway to the region with its low tariffs, free trade zones and tradition of allowing products which conform to overseas safety and emissions requirements to be sold in the UAE.”

The global economic crisis presents another challenge affecting the UAE. The credit crunch, job layoffs and uncertainties are present in this part of the world, and while the sale of luxury vehicles and the products to accessorize them continues nearly unabated, there has been a slowdown in sales to the non-Emirati buyer. Non-UAE citizens (85% of the population in Dubai) present the greatest potential for growth. According to analyst Business Monitor International (BMI), Emirati households own 2.35 vehicles per family on average. BMI reported that European, North Americans and East Asian expatriate (11%) as well as non-Emirati Arabs (21%) provide market potential. While sales growth has been temporarily dampened by the financial crisis, this presents another niche opportunity for SEMA members.

As in the U.S., education is an important component in growing the UAE market. Greater knowledge among enthusiasts as well as those who install and sell specialty products will improve safety as brand-name quality products coupled with installation by knowledgeable technicians help grow the market. This is an important task of industry said Mohammed Al-Bannai, manager of tuning shop Lap57, noting that the industry should pull together for the common purpose of educating not only the public but also tuners about their products.

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies,” Cozzie said. “There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for. It is evident from observations at the street level that this is a market waiting to be serviced. I have always said that car guys are car guys no matter where one travels in the world, and the Gulf region is no different. There is a passion for all types of vehicles there along with a growing community of racing competitors and a thirst for the ability to accessorize and customize one’s ride. And the timing couldn’t be better for exploring this growing market.”

Concluded SEMA Vice President of Events and Communications Peter MacGillivray: “This market is a tangible example that there are opportunities in the world when the domestic market is down, and it underscores the importance for all of our members to seek out overseas customers.”

SEMA News - August 2009

By Linda Spencer

Gateway to the Middle East

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies. There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for,” said Jim Cozzie, SEMA Board of Directors Immediate Past Chairman.

Of that number, said organizer Epoc Messe Frankfurt GmbH, 46% were international visitors who had converged on Dubai from 114 countries.

“The United Arab Emirates (UAE) and the Gulf region are very important markets for Evosport, as they represent a growing percentage of our business,” said Simon Atik about his retail and wholesale accessory sales company based in Huntington Beach, California. “It’s also a very exciting time, as the potential for the specialized aftermarket is immense, albeit in its infancy stages. The entire Gulf region is exploding with potential buyers, and there is an overwhelming demand for quality products.”

Bob Scheid of Perry, Ohio-based Fidanza Engineering Corp. was also among the visiting SEMA contingent and agreed that the UAE represents a real opportunity.

“We like to believe that Americans love their cars and this hobby more than anything else,” he said. “I really think we have some competition with what I saw. Not only is there passion, but they have the disposable income to spend. The markets are so similar in that they want good quality parts. The market in Dubai is not only the same, but they are willing to pay much more for quality. In the U.S., we love to customize, but there they want to do whatever it takes to make sure that their car is like no other on the road. If you pull up to a light and see two Corvettes, they will almost certainly be built totally differently. Uniqueness is not a goal; it’s mandatory.”

SEMA Immediate Past Chairman Jim Cozzie noted that SEMA traveled to the region to determine the viability of the market and identify the opportunities as well as hurdles regarding entry to the marketplace for member companies.

SEMA Board of Directors Immediate Past Chairman Jim Cozzie (left) and SEMA CEO and President Chris Kersting answered questions on car modification regulations at a seminar during Automechanika Middle East.

The UAE is a federation of seven emirates, including the capital, Abu Dhabi, as well as Dubai. Founded in 1971, this small but wealthy nation has a population of 4.7 million. The UAE borders Saudi Arabia and Oman and serves as the gateway to the other members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman. A significant percentage of products are shipped to Abu Dhabi or Dubai and then re-shipped to other GCC or middle Eastern countries.

The specialty-equipment market is quite new to the UAE and the region. A real passion for everything modified has spurred the growth of world-class distributors and installers, including Chrome and Carbon, Liberty Motor Sports, TAM, Lap57 and Extreme Performance. Well-known international companies are also setting up shop in the UAE. West Coast Customs has a showroom in Dubai, and Yellow Hat—a Japanese-based accessories chain—has signed an agreement to open five shops in the country. See SEMA's list of UAE distributors and installers.

Size of the Market

There are approximately 8.7 million vehicles in the Gulf region, with about 2.6 million vehicles registered in the UAE. The Dubai market represents about 45% of this total and Abu Dhabi accounts for another 30%. Market analyst Auto Strategies International estimates the number of cars in the road in the other GCC countries at 3.6 million in Saudi Arabia; 1.1 million in Kuwait; 352,000 in Qatar; 243,000 in Bahrain; and 793,000 in Oman.

Vehicle Mix

Slime was one of 50 SEMA-member companies exhibiting at the Automechanika Middle East Show recently held in Dubai.

Zlatko Mulabegovic of Top Performance magazine took note of the number of light trucks on the road, commenting that the UAE market is similar to the one in the U.S. but is significantly smaller. It is also heavily influenced by aftermarket trends in the United States, and Mulabegovic estimated that at least 25% of the customized vehicles in the UAE are SUVs or light pickups.

“SUVs dominated alongside foreign compacts like Mitsubishi, Honda and Toyota,” said Mike Robleto of U.S.-based Motor Media.

Mulabegovic identified other top modified vehicles that included the Honda Civic, the Mitsubishi EVO, the Ford Mustang and the Nissan 350Z and Patrol.

Robleto said that one of the highlights of his visit was a trip to Dubai-based TAM Automotive.

“TAM Automotive is an over-the-top impressive tuning shop that modified sport compacts but also a slew of high-end Euros and hot rods like an AC Cobra and a ’60s Corvette Stingray,” he said. “This amazing facility has a four-wheel dyno and maintains two race teams that compete in the local road course championship series. An engine-building room and a bustling crew of mechanics solidified the UAE’s seriousness about aftermarket performance.”

Quality and Brand Awareness

The SEMA delegation visited Dubai-based TAM Automotive. The shop houses a state-of-the-art dyno and is currently working on a dizzying array of vehicles, including sport compacts and American hot rods as well as a host of Japanese and high-end European vehicles.

“When business gets more challenging, that is the time to get more aggressive in procuring new customers,” said Jeff Victor of Treatment Products. “Our goal was to sign new distributors in previously untapped markets. Although we do currently sell our products to the major Middle East markets, such as the UAE and Saudi Arabia, there are still many other markets in the region that are clamoring for U.S. products. Markets such as Qatar, Oman, Bahrain and Kuwait are all very receptive to U.S. goods and are good places for U.S. companies to do business.”

Tariff Levels

The UAE has one of the most open economies in the world. Tariff levels are low—up to 5% on manufactured goods—and the liberal use of free-trade zones (which offer 100% foreign ownership and zero taxes throughout the UAE) has further reduced the costs of doing business in the region. The U.S. and UAE governments have begun talks on a tariff-free arrangement between the two countries, and free-trade agreements exist with two other countries in the Gulf region—Bahrain and Oman

Buying Power

With a per-capita income (on a purchasing parity basis) of U.S. $55,000 compared to U.S. $46,000 in the U.S., the UAE offers a significant number of buyers who are in a position to purchase specialty- automotive products—and do. A unique characteristic of the specialty-equipment market in the UAE is its combination of passion and good buying power.

The industry in the UAE started much like it did in the United States. Look at Abdulla Al Zaabi of Extreme Performance. Al Zaabi’s business grew out of his personal interest in drag racing. “The origin of the company was when I used to race my old four-cylinder Mitsubishi Turbo at the drag strip back in 2002. I realized that I couldn’t find a decent shop which could take care of my own performance upgrades. The result is a thriving company which is a leader in modifying SUVs (particularly Jeeps) and sport vehicles.” Abdulla shares the credit for this firm “It’s combining Sheikh Abdulla’s[Sheikh Abdulla Bin Mohammed Bin Butti Al Hamed] vision, my experience in the performance and tuning industry and the guys in the shop.”

Challenges

Drag racing in Umm Al Quwain. (Photo courtesy of Top Performance magazine)

One of the goals for the SEMA trip was to talk to local industry and government leaders about the size of the market, the important role the industry plays in the U.S. and to gain a better understanding about the legal environment in the GCC as well as the UAE. SEMA had fruitful discussions with local industry and government leaders, which afforded the opportunity to discuss the legal environment, markets and trends in both countries.

“We found the UAE and Dubai government officials very welcoming to SEMA’s input as they begin to contemplate a regulatory framework addressing the specialty-equipment industry,” reflected SEMA CEO and President Chris Kersting. “U.S.-type regulations would fit well in the UAE. The country already has developed into a key gateway to the region with its low tariffs, free trade zones and tradition of allowing products which conform to overseas safety and emissions requirements to be sold in the UAE.”

The global economic crisis presents another challenge affecting the UAE. The credit crunch, job layoffs and uncertainties are present in this part of the world, and while the sale of luxury vehicles and the products to accessorize them continues nearly unabated, there has been a slowdown in sales to the non-Emirati buyer. Non-UAE citizens (85% of the population in Dubai) present the greatest potential for growth. According to analyst Business Monitor International (BMI), Emirati households own 2.35 vehicles per family on average. BMI reported that European, North Americans and East Asian expatriate (11%) as well as non-Emirati Arabs (21%) provide market potential. While sales growth has been temporarily dampened by the financial crisis, this presents another niche opportunity for SEMA members.

As in the U.S., education is an important component in growing the UAE market. Greater knowledge among enthusiasts as well as those who install and sell specialty products will improve safety as brand-name quality products coupled with installation by knowledgeable technicians help grow the market. This is an important task of industry said Mohammed Al-Bannai, manager of tuning shop Lap57, noting that the industry should pull together for the common purpose of educating not only the public but also tuners about their products.

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies,” Cozzie said. “There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for. It is evident from observations at the street level that this is a market waiting to be serviced. I have always said that car guys are car guys no matter where one travels in the world, and the Gulf region is no different. There is a passion for all types of vehicles there along with a growing community of racing competitors and a thirst for the ability to accessorize and customize one’s ride. And the timing couldn’t be better for exploring this growing market.”

Concluded SEMA Vice President of Events and Communications Peter MacGillivray: “This market is a tangible example that there are opportunities in the world when the domestic market is down, and it underscores the importance for all of our members to seek out overseas customers.”

SEMA News - August 2009

By Linda Spencer

Gateway to the Middle East

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies. There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for,” said Jim Cozzie, SEMA Board of Directors Immediate Past Chairman.

Of that number, said organizer Epoc Messe Frankfurt GmbH, 46% were international visitors who had converged on Dubai from 114 countries.

“The United Arab Emirates (UAE) and the Gulf region are very important markets for Evosport, as they represent a growing percentage of our business,” said Simon Atik about his retail and wholesale accessory sales company based in Huntington Beach, California. “It’s also a very exciting time, as the potential for the specialized aftermarket is immense, albeit in its infancy stages. The entire Gulf region is exploding with potential buyers, and there is an overwhelming demand for quality products.”

Bob Scheid of Perry, Ohio-based Fidanza Engineering Corp. was also among the visiting SEMA contingent and agreed that the UAE represents a real opportunity.

“We like to believe that Americans love their cars and this hobby more than anything else,” he said. “I really think we have some competition with what I saw. Not only is there passion, but they have the disposable income to spend. The markets are so similar in that they want good quality parts. The market in Dubai is not only the same, but they are willing to pay much more for quality. In the U.S., we love to customize, but there they want to do whatever it takes to make sure that their car is like no other on the road. If you pull up to a light and see two Corvettes, they will almost certainly be built totally differently. Uniqueness is not a goal; it’s mandatory.”

SEMA Immediate Past Chairman Jim Cozzie noted that SEMA traveled to the region to determine the viability of the market and identify the opportunities as well as hurdles regarding entry to the marketplace for member companies.

SEMA Board of Directors Immediate Past Chairman Jim Cozzie (left) and SEMA CEO and President Chris Kersting answered questions on car modification regulations at a seminar during Automechanika Middle East.

The UAE is a federation of seven emirates, including the capital, Abu Dhabi, as well as Dubai. Founded in 1971, this small but wealthy nation has a population of 4.7 million. The UAE borders Saudi Arabia and Oman and serves as the gateway to the other members of the Gulf Cooperation Council (GCC), which includes the UAE, Saudi Arabia, Kuwait, Bahrain, Qatar and Oman. A significant percentage of products are shipped to Abu Dhabi or Dubai and then re-shipped to other GCC or middle Eastern countries.

The specialty-equipment market is quite new to the UAE and the region. A real passion for everything modified has spurred the growth of world-class distributors and installers, including Chrome and Carbon, Liberty Motor Sports, TAM, Lap57 and Extreme Performance. Well-known international companies are also setting up shop in the UAE. West Coast Customs has a showroom in Dubai, and Yellow Hat—a Japanese-based accessories chain—has signed an agreement to open five shops in the country. See SEMA's list of UAE distributors and installers.

Size of the Market

There are approximately 8.7 million vehicles in the Gulf region, with about 2.6 million vehicles registered in the UAE. The Dubai market represents about 45% of this total and Abu Dhabi accounts for another 30%. Market analyst Auto Strategies International estimates the number of cars in the road in the other GCC countries at 3.6 million in Saudi Arabia; 1.1 million in Kuwait; 352,000 in Qatar; 243,000 in Bahrain; and 793,000 in Oman.

Vehicle Mix

Slime was one of 50 SEMA-member companies exhibiting at the Automechanika Middle East Show recently held in Dubai.

Zlatko Mulabegovic of Top Performance magazine took note of the number of light trucks on the road, commenting that the UAE market is similar to the one in the U.S. but is significantly smaller. It is also heavily influenced by aftermarket trends in the United States, and Mulabegovic estimated that at least 25% of the customized vehicles in the UAE are SUVs or light pickups.

“SUVs dominated alongside foreign compacts like Mitsubishi, Honda and Toyota,” said Mike Robleto of U.S.-based Motor Media.

Mulabegovic identified other top modified vehicles that included the Honda Civic, the Mitsubishi EVO, the Ford Mustang and the Nissan 350Z and Patrol.

Robleto said that one of the highlights of his visit was a trip to Dubai-based TAM Automotive.

“TAM Automotive is an over-the-top impressive tuning shop that modified sport compacts but also a slew of high-end Euros and hot rods like an AC Cobra and a ’60s Corvette Stingray,” he said. “This amazing facility has a four-wheel dyno and maintains two race teams that compete in the local road course championship series. An engine-building room and a bustling crew of mechanics solidified the UAE’s seriousness about aftermarket performance.”

Quality and Brand Awareness

The SEMA delegation visited Dubai-based TAM Automotive. The shop houses a state-of-the-art dyno and is currently working on a dizzying array of vehicles, including sport compacts and American hot rods as well as a host of Japanese and high-end European vehicles.

“When business gets more challenging, that is the time to get more aggressive in procuring new customers,” said Jeff Victor of Treatment Products. “Our goal was to sign new distributors in previously untapped markets. Although we do currently sell our products to the major Middle East markets, such as the UAE and Saudi Arabia, there are still many other markets in the region that are clamoring for U.S. products. Markets such as Qatar, Oman, Bahrain and Kuwait are all very receptive to U.S. goods and are good places for U.S. companies to do business.”

Tariff Levels

The UAE has one of the most open economies in the world. Tariff levels are low—up to 5% on manufactured goods—and the liberal use of free-trade zones (which offer 100% foreign ownership and zero taxes throughout the UAE) has further reduced the costs of doing business in the region. The U.S. and UAE governments have begun talks on a tariff-free arrangement between the two countries, and free-trade agreements exist with two other countries in the Gulf region—Bahrain and Oman

Buying Power

With a per-capita income (on a purchasing parity basis) of U.S. $55,000 compared to U.S. $46,000 in the U.S., the UAE offers a significant number of buyers who are in a position to purchase specialty- automotive products—and do. A unique characteristic of the specialty-equipment market in the UAE is its combination of passion and good buying power.

The industry in the UAE started much like it did in the United States. Look at Abdulla Al Zaabi of Extreme Performance. Al Zaabi’s business grew out of his personal interest in drag racing. “The origin of the company was when I used to race my old four-cylinder Mitsubishi Turbo at the drag strip back in 2002. I realized that I couldn’t find a decent shop which could take care of my own performance upgrades. The result is a thriving company which is a leader in modifying SUVs (particularly Jeeps) and sport vehicles.” Abdulla shares the credit for this firm “It’s combining Sheikh Abdulla’s[Sheikh Abdulla Bin Mohammed Bin Butti Al Hamed] vision, my experience in the performance and tuning industry and the guys in the shop.”

Challenges

Drag racing in Umm Al Quwain. (Photo courtesy of Top Performance magazine)

One of the goals for the SEMA trip was to talk to local industry and government leaders about the size of the market, the important role the industry plays in the U.S. and to gain a better understanding about the legal environment in the GCC as well as the UAE. SEMA had fruitful discussions with local industry and government leaders, which afforded the opportunity to discuss the legal environment, markets and trends in both countries.

“We found the UAE and Dubai government officials very welcoming to SEMA’s input as they begin to contemplate a regulatory framework addressing the specialty-equipment industry,” reflected SEMA CEO and President Chris Kersting. “U.S.-type regulations would fit well in the UAE. The country already has developed into a key gateway to the region with its low tariffs, free trade zones and tradition of allowing products which conform to overseas safety and emissions requirements to be sold in the UAE.”

The global economic crisis presents another challenge affecting the UAE. The credit crunch, job layoffs and uncertainties are present in this part of the world, and while the sale of luxury vehicles and the products to accessorize them continues nearly unabated, there has been a slowdown in sales to the non-Emirati buyer. Non-UAE citizens (85% of the population in Dubai) present the greatest potential for growth. According to analyst Business Monitor International (BMI), Emirati households own 2.35 vehicles per family on average. BMI reported that European, North Americans and East Asian expatriate (11%) as well as non-Emirati Arabs (21%) provide market potential. While sales growth has been temporarily dampened by the financial crisis, this presents another niche opportunity for SEMA members.

As in the U.S., education is an important component in growing the UAE market. Greater knowledge among enthusiasts as well as those who install and sell specialty products will improve safety as brand-name quality products coupled with installation by knowledgeable technicians help grow the market. This is an important task of industry said Mohammed Al-Bannai, manager of tuning shop Lap57, noting that the industry should pull together for the common purpose of educating not only the public but also tuners about their products.

“The UAE market holds a large degree of promise as a growth opportunity for SEMA-member companies,” Cozzie said. “There is demand, resources and a wide variety of vehicles that our member companies currently offer parts for. It is evident from observations at the street level that this is a market waiting to be serviced. I have always said that car guys are car guys no matter where one travels in the world, and the Gulf region is no different. There is a passion for all types of vehicles there along with a growing community of racing competitors and a thirst for the ability to accessorize and customize one’s ride. And the timing couldn’t be better for exploring this growing market.”

Concluded SEMA Vice President of Events and Communications Peter MacGillivray: “This market is a tangible example that there are opportunities in the world when the domestic market is down, and it underscores the importance for all of our members to seek out overseas customers.”

SEMA News - August 2009

By Steve Campbell
Illustration Colby Martin

All Segments of the Industry Have an Interest in Employing Common Standards

Just because a company has a highly detailed Excel spreadsheet that provides two dozen fields jammed with product data doesn’t mean that it has good data. Data is simply information. Good data is the appropriate information provided in correct formats.

As it pertains to automotive specialty-equipment businesses, data is the size, weight, quantity, price and other descriptive factors that tell a distributor, jobber or dealer about a manufacturer’s product. Ultimately, it’s the information that allows the distribution chain to pass the right product at the proper price from the maker to the end user. But as information is computerized and exchanged electronically—transformed from a written description at one end into a numeric code that is read by a machine and then reformed back into a written description at the other end—data must be strictly standardized in order to be valid. And it’s very easy for one company’s written description to be lost in translation as it moves to another company’s computer.

Bob Moore, president of Bob Moore+Partners and a member of SEMA’s Business Technology Committee, offered an excellent example: “I loaded a song by the Doobie Brothers onto my iPod,” he said. “But when I wanted to listen to it, I couldn’t find it. After scrolling through almost my entire catalog of artists, I discovered that, rather than indexing the group under ‘D’ for Doobie, my iPod had indexed it under ‘T’ for The Doobie Brothers.”

One of the most popular automotive brands in the world is fodder for another example. If Manufacturer A enters a Chevrolet part as being for a Chevy but its distributors’ computer recognizes only the automaker’s full name, the data transfer will be confused. Then throw in the jobber’s misinterpretation when its computer is looking for Chev, because that’s what the data-entry person learned to call the brand growing up. The result is a flurry of phone calls and delays—often outright missed sales—because of a basic data error. And we haven’t even mentioned the disorder wreaked by Chevy/GMC.

Human beings have the undeniable advantage of being able to interpret words, signals, signs and even subtle gestures. We immediately and automatically understand that Chevrolet, Chevy, Chev and even Chevie stand for the same company. We know that a pack is a unit that contains more than one individual item, though we might also call it a package or a box or even a crate. But a computer sees each of those terms as a distinctly different item. Any missing or incorrectly added bit of information stymies a computer’s ability to find or correctly categorize data. That’s why industry-wide data standardization has become so important.

The Product Information Exchange Standard (PIES) was developed to create universally accepted formats for key product-data items, including part number, part type, weight, size, pricing and more. As the electronic transfer of product information has proliferated and become the most widespread means by which commerce is conducted, all companies in all segments of the industry have a vested interest in employing common data standards.

Some companies—especially those that deal with a large assortment of parts or those small enough not to have a dedicated data manager—may be intimidated by the idea of having to standardize product data. And, to be realistic, it is a process that takes some time and effort. But so does picking up the phone for one transaction after another to sort out why an order was incomplete or the wrong part was shipped or the wrong quantity was received. Once standardization is complete, those problems don’t occur, and we can get on with the business of providing the parts people want to buy.

Learn more about standards and find resources.

A Glossary of Terms

A Quick Primer on Speaking Geek

By Gigi Ho

AAIA Legacy: The original Automotive Aftermarket Industry Association electronic catalog standard for vehicle year, make, model and engine. Files are delivered in a flat file format.

ACES (AAIA Catalog Enhanced Standard): The current electronic cataloging standard, replacing Legacy, comprised of vehicle year, make, model, engine and vehicle attributes in a relational database. Files are delivered in an XML format.

PIES (Product Information Exchange Standards): Standardized fields of product information such as part number, descriptions, pricing, dimensions, weight, packaging, etc. Files are delivered in an XML format.

Delimited Text File: A flat file format that is an array of data separated by any character. The most common delimiters are tabs, commas and vertical bars (AKA “pipe”).

XML (Extensible Mark-Up Language): Tags that define and validate data and facilitate transmission and interpretation of data between two or more companies’ systems, the supplier of data and the receiver(s) of data.

Relational Database: A database whose structure is made up of numerous separate but linked tables of information. One of the advantages of a relational database is that duplication of entries is reduced or even eliminated. In a parts database, for example, there would be a separate table for part types/categories. For each part summary, a link is made to the applicable part type/category in the part type table. As a result the word “turbocharger” would actually be entered only once in the database but would appear linked in all applicable records.

Data Mapping/Cataloging: The creation of a full record of information about a part, cross-referenced to other records and files. Catalogers often prepare and keep up the information about the parts. Some of the information recorded includes the brand name, part descriptions, dimensions, photos, fitment on a vehicle, etc.

Learn more technology terms and jargon.