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After taking a hit in March, the SEMA PADI recovered by 14 points in April, showing that consumers were feeling more optimistic about spending their money on automotive specialty-equipment last month. The current PADI reading is at 56, jumping 35% from a March reading of 42. The current index value translates to 15% of adult American drivers (or approximately 15 million households) now making plans for specialty-equipment purchases over the next three months.

The charts below show both the index values (black line, values on the left of graph) as well as the percentage of consumers indicating plans to purchase specialty equipment in the coming three months (blue, dashed line, values on the right of graph).

 
Several factors contribute to fluctuations in demand by mainstream consumers for specialty-equipment parts and accessories. In March, U.S. new-vehicle sales increased 15% compared to February, and sales of specialty equipment historically show seasonal shifts similar to new-vehicle sales. Consumers are still feeling the effects of a slow economy, which can explain why the SEMA PADI was lower in April 2008 compared to the same month last year.

Market research firm TechnoMetrica's TIPP Economic Optimism Index declined 3.3 points, or 7.8% in April, reaching 39.2 vs.42.5 in March. April’s reading represented an all-time low for the Index and the first time in its history that it has come in at a reading below 40.0. This monthly economic survey is sent to consumers in order to gauge their attitudes toward economic prosperity and continues to show a steady decline following a drop in 2007.

 

PADI In-Depth
By product, specialty accessories and appearance products were the most popular specialty-equipment products consumers were likely to purchase (10% or about 10 million households) in April, up from 6% in March. This increase is even more pronounced compared to the reading in April of 2007, where only 5% of consumers planned to purchase. This most recent reading shows a 120% increase in demand for appearance and accessory products when comparing this year’s Index value compared to 2007.

 

Wheels, tires and suspension components were the second product preference, with 8% (about 8 million households) indicating plans to purchase, identical to those surveyed in March. This reading is 5% less than those surveyed in April 2007, however.

About 7% or about 7 million households indicated that they plan to purchase racing and performance products within the next three months, an increase from 4% in March but steady compared to the 7% reading in April 2007.

Over the last three months, on average, pickups (27%) were the most common target vehicles for enhancement or modification, followed by midsize and compact cars (16% each) and fullsize cars (13%).

Independent parts stores (23%), car dealerships and online venues (17% each) were the most popular purchase destinations among those planning to enhance their vehicles, followed by chain auto parts stores with 11% of the vote.

When specialty-equipment buyers were asked this month what form their vehicle would take after customization, the most common answer was “general personalization” or restyling, (41%) followed distantly by “off-road” (15%), “restoration” (13%) and “street performance” (13%).

Methodology
Although similar to economic indexes, the index SEMA has been working on is not designed to report past activity, but rather consumers’ expectations of future purchases from the specialty-equipment industry.

The Indices track consumers’ plans to purchase performance parts and/or accessories within the next three months after each respective survey. This will help provide a rough forecast for demand of specialty equipment in the near future. The SEMA Performance Parts and Accessories Demand Index (PADI), and each of the three sub-indices, is a weighted composite index computed relative to its own baseline value, calculated by taking an average of January through March 2007 raw percentages.

This average is then set to 100, and each month’s index is computed relative to the change from its baseline. The indices and their movements are projectable to the national market for specialty-equipment products, which consists of more than 114 million U.S. households.

SEMA has contracted with TechnoMetrica to gather the data used in building and maintaining the PADI. Each month TechnoMetrica uses a Random Digit Dial (RDD) telephone survey to collect the data in order to provide a nationally representative sample of U.S. consumers. Typically the responses total between 850 and 1,000 in any given month. The margin of error is normally within the plus or minus 3%–4% range.

Although the PADI is not a precise measure of absolute future purchasing activity, it is nonetheless a tool for understanding and predicting industry sales. There are two ways of interpreting the PADI: its "direction," whether rising or falling, and also the values themselves, which provide a guide as to the degree of change in consumer expectations for purchasing industry products.

For more original industry insight, please visit www.sema.org/research.

There are several new compact-performance vehicles that have been introduced, or are slated for a 2008–2009 release, into the U.S. market, each offering its own unique design aimed at attracting the most enthusiastic and individual of customizers.

"Never before have compact-performance enthusiasts had such a wide spectrum of genuine performance models to choose from, and as a result of gas prices, vehicle manufacturers are scheduled to continue their development of options slated under the traditional sports car threshold,” said SEMA Research Analyst Zack Krelle, who recently conducted a market forecast study on compact-performance vehicles. “Consequently, it is conceivable that this niche will refine and grow; something it has done for over a decade."

BMW released its 1 Series to appeal to consumers interested in an upscale, affordable car. Production began in 2004, with an update in 2007, but this is the first time the model has been released in the United States. Notable features include rear-wheel drive, dynamic handling and a powerful engine borrowed from the 3 and 5 Series sedans. If tuners find the price reasonable, the 1 Series has the potential to continue its overseas success. 

“The BMW 1 series uses the same engine as the 335i, so it’s a twin-turbo engine in a smaller platform,” said Daryl Sampson, Sales and Marketing Manager for Advanced Clutch Technology Inc. “The price point makes it attractive for younger enthusiasts that typically cannot afford the 335i. The demographic for the 1 Series is the same as the people who would be able to afford the Subaru STI and the Mitsubishi Evolution.”

Hyundai’s Genesis coupe, scheduled for a spring 2009 release, has the characteristics to disrupt the leaders. It boasts rear-wheel drive and big power, but is set to start at an attractive price point in the low-to-mid $20,000 range. The concept mock-up was fitted with trick parts, and it appeared to be accessory-friendly.

“The Hyundai Genesis coupe promotes Hyundai as a sport-compact performance brand, which prior to this hasn’t been their forte at all. The Genesis will catapult them into a tuner market,” said Sampson.

Infiniti released its new G Sedan, dubbed the G37, to replace its Skyline-based G35 predecessor. The exterior has been remodeled, the chassis has been strengthened, and the engine has been bumped up in power and features. It should continue to be a widely popular coupe.

“Infiniti has definitely hit the mark with their G37,” said Eric Breslow, Chairman of SEMA’s Sport-Compact Council. “The technology and performance are remarkable.”

Nissan’s much-hyped GT-R will make its North American debut in June 2008. While its output is impressive and bargain-based compared to similarly performing vehicles, it will be less attainable for enthusiasts than they would imagine. The buzz-machine has been cranked up so high over the course of its long development that the markup could be extreme when it hits the showrooms. Furthermore, concerns about its highly secure engine control unit (ECU) and turbochargers—which are integrated directly into the exhaust manifold—will require extensive and expensive work to improve upon. Nevertheless, Breslow maintains that the GT-R is “poised to be Japan’s answer to the Corvette.”

“The Nissan GT-R is probably the biggest thing in the sport-compact market right now. The price puts it out of range for a lot of the traditional sport-compact performance enthusiast, but in the last 10 years or so that market itself has grown up, so you are dealing with a little more of an affluent buyer. The people who would buy this car are the same as those who would buy the Porsche, because essentially you are looking at a $70,000 car,” said Sampson.  

Mitsubishi’s Lancer Evolution X, Subaru’s Impreza WRX STI and Volkswagen’s GTI R32 have all been updated. These famed all-wheel-drive, factory-tuned machines are good for daily driving and weekend track days, and all three models come with loads of power, big brakes and sticky tires. Aside from the Subaru becoming a hatchback, the formulas have not changed.

Not typically seen as a sport compact, the Smart Fortwo should be something on everyone’s radar. It has a huge global following and trendy appeal. Despite an array of overwhelming performance features, it could become a nice target for accessorizing. Wheel options could be problematic, as it has an uncommon three-lug bolt pattern.

“There are some very exciting new cars on the road these days,” said Breslow. “These cars all have their own personality ripe for tuners to customize."

To read the full report on the compact-performance market, visit http://www.sema.org/main/semaorghome.aspx?id=59337.

For more original SEMA market research, visit www.sema.org/research.

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SEMA Webinar: “Advanced Guide to High Search Engine Rankings”
Thursday, May 8, 2008, 10:00 a.m. (PST)

Don't underestimate the business importance of a good website. A clear, uncluttered web presence can mean the difference between a walk and a sale. But if customers can't find your site to begin with, you're simply leaving money on the table.

If you missed Thursday's webinar, "Beginner's Guide to High Search Engine Rankings," don't worry. An archived audio version of the webinar will be available for download next week. Make sure to tune in for next week's follow-up, "Advanced Guide to High Search Engine Rankings" to learn the next vital steps to your web marketing success.

Presenter Brian Offenberger of BizGrowth Search Engine Solutions will cover advanced marketing techniques to ensure that prospects can easily find your website.

Learn the essentials of:

• Advanced strategies for high search-engine rankings
• How to use blogs, podcasts, YouTube, social networks and social media for high search-engine rankings
• FREE tools for evaluating performance 
• Common mistakes and how to avoid them 
• Education resource centers for do-it-yourselfers
  

• Low-cost/no-cost market testing for businesses of all sizes, both in online and offline marketing efforts
• FREE tools businesses can use for do-it-yourself testing programs
• How to inexpensively and effectively conduct a valid test
• Fatal mistakes to avoid when testing
• How to make testing work for you

Raymond Bleiweis, Ben Nighthorse Campbell, Corky Coker and Robert Cook will be inducted into the SEMA Hall of Fame, an elite group of industry innovators and pioneers who have played a key role in the automotive specialty equipment market.

Since 1969, the SEMA Hall of Fame has paid homage to the industry leaders who have contributed to the health and success of the automotive specialty equipment market. The induction of the four newest individuals brings the total SEMA Hall of Fame membership to 125, a relatively small and elite group in a $36.7 billion industry.

While there are clear and definite criteria that SEMA Hall of Fame members must meet, this year’s inductees represent a diverse group that includes innovators, businessmen and government leaders.

Raymond Bleiweis: In addition to founding Rocket Industries, the Pico Rivera, CA-based distributor of custom wheels and wheel accessories, Bleiweis is a pioneer in industry safety. He was instrumental in the formation of the SFI Foundation, Inc. (SFI), a non-profit organization that began as a program within SEMA. While the SFI Foundation now operates independent from SEMA, it remains strongly committed to safety.

Ben Nighthorse Campbell: The U.S. Senator from Colorado is the highest elected official on a national level to steadfastly support the industry. Campbell helped found the Congressional Automotive Performance and Motorsports Caucus and helped grow its membership to more than 100. Many credit him with raising the industry’s level of visibility and influence in Washington.

Corky Coker: Coker, well-known for the classic white-wall tires that bear his name, is a former SEMA chairman who also helped establish the Automotive Restoration Market Organization (ARMO). Having served on numerous SEMA committees and task forces, he implemented several changes to create new business opportunities for members.

Bob Cook: Cook began his career as a delivery boy for a NAPA store. After working retail for nearly a decade, he moved over to a rep agency and eventually formed Bob Cook Sales. In addition to leading his agency to being named SEMA Rep of the Year Award five times, Cook volunteered time to advancing the industry by serving on the SEMA Board of Directors and participating on several SEMA committees.

The Hall of Fame inductees will be officially introduced at the SEMA Installation Banquet & Gala Fundraiser, Friday, July 25, at the Hyatt Regency Irvine, in Irvine, California. The event includes dinner and includes the formal induction of the newly elected SEMA board members.

Tickets and details are available at www.sema.org/gala, or may be obtained from Lisa Moreno at lisam@sema.org, 909/396-0289, ext. 105.

Manufacturers of automotive accessories are showing no signs of slowing down, with 1,643 exhibitors already signed up to participate in the 2008 SEMA Show on Tuesday–Friday, Nov. 4–7, 2008, in Las Vegas. The trade-only event targets the $36.7 billion automotive specialty-equipment market, which includes products that enhance the styling and functionality of cars, trucks and SUVs.

“It’s early in the process, but it appears that the SEMA Show will be another sell-out year,” said Peter MacGillivray, SEMA vice president of communication and events. “It’s exciting to see such involvement and interest from the industry, especially in today’s challenging economic times. Recognizing the importance that the industry places on the SEMA Show, we’re working hard to provide Showgoers with high-value opportunities throughout the week.”

For 42 years, the SEMA Show has served as a trading post for the annual unveiling of new products and technology where manufacturers and buyers come together. Last year, the event featured more than 2,000 exhibitors and attracted more than 130,000 industry professionals from all over the world.

The SEMA Show, according to MacGillivray, is the single best place to learn what’s happening in the industry. “The Show features thousands of new products and manufacturers. But what’s more is that the seminars and activities make it possible for Showgoers to mix and mingle with key industry players, and learn new business skills and strategies.”

Among the 2008 SEMA Show features that give Showgoers added value are:

• Pre-Show strategies for exhibitors: Exhibitors are invited to participate in free online webinars prior to the SEMA Show, where they will learn about specific programs and strategies for success at the SEMA Show.
• Pre-Show planners: Buyers and exhibitors are able to utilize an online show planner to pre-plan and pre-identify events and activities of specific interest.
• Media connections: Exhibitors can provide press kits and media materials in the SEMA Show Media Center, a location where more than 3,000 media representatives visit during the week.
• New product promotion: New products can be included in a special showcase, as well as photographed and promoted to thousands of media throughout the year.
• Business seminars: Nearly 50 educational seminars take place during the week, all are available to Showgoers free of charge.
• Project-vehicle connections: Exhibitors are able to gain added exposure by featuring their project vehicles at the Show; exhibitors may also offer their products to other project vehicle builders through SEMA’s Products for Project-Vehicle Builders Program.

Manufacturers interested in exhibiting at the 2008 SEMA Show should contact Show Management at 702/450-7662, ext. 120, or go online at www.SEMAShow.com/buyabooth. Industry professionals may register to attend online at www.SEMAShow.com.

SEMA announced the appointment of Brian Duggan as its new Director of Congressional Affairs. Duggan comes to the association with a broad range of public policy expertise. He has a combined experience of 20 years in lobbying, government relations and policy having previously worked in Washington, D.C., for the Motor and Equipment Manufacturers Association and the U.S. Department of Commerce. Brian is from Maryland and has a master’s degree from The George Washington University and a bachelor’s degree from Villanova University.

“Brian brings to SEMA a wealth of experience in government relations, legislative analyses and advocacy, as well as the development and implementation of policy,” SEMA’s Vice President of Government Affairs Steve McDonald commented. “We are pleased to have someone of his experience to supplement our continuing efforts on Capitol Hill in promoting the industry to federal lawmakers. The breadth of his knowledge on issues of critical importance to the aftermarket will provide SEMA with an effective advocate and a valuable resource in our efforts to protect and advance the aftermarket industry.” 

SEMA maintains an experienced government affairs staff and legal team in Washington, D.C. Responsible for communicating and advocating issues affecting the specialty automotive aftermarket, SEMA’s government affairs office has proven to be an influential and effective force in ensuring the continued growth and prosperity of the industry.

“I am very excited to have the opportunity to work with SEMA members and staff. The industry has a great history and is making important contributions to the American economy and society. Several members of Congress are already automobile collectors, restorers and enthusiasts.  We want to tap in more to that base to build a higher awareness and appreciation of the industry in Congress and its role in society across the board,” Duggan said.