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Despite feeling positive sentiment in February, consumers are now feeling less optimistic about spending money customizing their vehicles. In March, the SEMA Performance Parts and Accessories Demand Index (PADI) lost 39 points, or 49%, going from 81 to 42 last month. Currently, 11% of adult American drivers (or approximately 11-plus million households) are now committing to 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 percent of consumers indicating that they plan to purchase specialty equipment in the coming three months (blue-dashed line, values on the right of graph).

Although the drop looks daunting, specialty-equipment sales typically follow yearly cyclical trends.  The mainstream consumers surveyed here are increasingly concerned about the economy and its future outlook, leading them to hold off discretionary purchases at the moment.

Several factors contribute to fluctuations in demand for specialty-equipment parts and accessories by mainstream consumers. Economic optimism also declined in March, dropping two points, or 4.5%, to reach 42.5, as noted by Technometrica’s TIPP Economic Optimism Index. 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 drops in 2007.  As we can see from the jumps in all three subsegments of the PADI, consumers are more cautious to spend money on their vehicles.

PADI In-Depth

Wheels, tires and suspension components were the most popular aftermarket products consumers were likely to purchase (8%, or about eight million households), followed by specialty accessories and appearance products (6%, or about six million households) and racing and performance products (4%, or about four million households). In terms of index values, these percentages translate to 39, 68, and 40, respectively, as noted by the charts below.

Over the last three months, on average, pickups (22%) and midsize cars (19%) were the most common target vehicles for enhancement or modification, followed by fullsize (13%) and compact cars (14%). On average, independent parts stores (23%) and car dealerships (21%) were the two most popular purchase destinations among those planning to enhance their vehicles, followed by chain auto parts stores (15%) and the Internet (9%). When aftermarket buyers were asked what form their vehicle would take after customization, the most common answer was general personalization (56%), followed distantly by street performance (13%), restoration (7%) and off-road (7%).

Methodology

Although similar to economic indexes, the index SEMA is not designed to report past activity, but rather the expectations of future purchases. 

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 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 SEMA PADI. Each month TechnoMetrica uses a Random Digit Dial (RDD) telephone survey to collect the survey 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% to 4% range.

Although the PADI is not a precise measure of absolute future purchasing activity, it is a tool for understanding and predicting industry sales. There are two ways of interpreting the PADI. First, its direction—whether the index is rising or falling. Second, the values themselves provide a guide as to the degree of change in consumer expectations for purchasing industry products. For more SEMA market research, visit www.sema.org/research.

Source: SEMA

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Is your company under siege by counterfeit products and illegal knock-offs? Are your trademarks or patents being infringed? Are your marketing materials being copied? Then mark your calendar, and plan to tune in for a timely discussion on how to implement a legal strategy to protect your intellectual property—your company’s patents, trademarks, copyrights and trade secrets.

The success of the annual SEMA Show was repeated in 2007, this time marked by a three-year high in buyer attendance with half of all attendees registered as buyers. 
 
There was a total of 73,132 registered buyers at the 2007 Show, an increase of 16% from 2006 when there were 62,895 buyers, and 6% higher than 2005 when there were 68,896 buyers. 
 
At the 2007 Show, 50% of all attendees were buyers, 28% were exhibitors and 22% were registered as non-buyer/other.
 
Buyer enthusiasm was even stronger among international attendance—15,983 or 58% of all international attendees were buyers, 24% were exhibitors and 18% were registered as non-buyers/other. 
 
“These numbers are highlighting the fact that exhibitors continue to showcase cutting-edge products and technologies that can only be found in one place—the SEMA Show,” said Peter MacGillivray, SEMA vice president of communications and events. “In fact, the showcase they produce is so compelling that an increasing number of buyers are willing to travel from halfway around the world to attend the Show. It's exciting to see industry members continue to influence markets around the world.”
 
With such a significant portion of buyers in attendance, it is no surprise that the SEMA Show Attendee Survey revealed that 83% of attendees make purchases after the Show. Each exhibitor averages 353 leads.
 
“We have scored some big accounts. These are absolutely qualified leads!” said Debbie Casson, a 2007 SEMA Show exhibitor. 
 
Attendee registration for the 2008 SEMA Show is now available by clicking here. For more information on the 2008 SEMA Show, visit www.SEMAShow.com.  

Plans are underway for the return of the live and silent auctions taking place at the SEMA Installation Banquet & Gala Fundraiser. Already confirmed are two rare items. The first is a Victory motorcycle that was ridden by Kyle Petty on one of his cross-country charity rides. The other item is a seat/reservation to take part in Kyle Petty’s “Ride Across America” charity ride. The annual trek features NASCAR celebrities and often has hundreds of motorcycle enthusiasts waiting to participate. 

The fundraising activities were incorporated into the SEMA Installation Banquet last year, providing SEMA members and the industry with an opportunity to fully celebrate the health and prosperity of the industry. More than 600 individuals attended the festivities, which included a charity golf tournament, live and silent auctions, dinner and entertainment. Complete details about this year’s event taking place Friday, July 25, are available at www.sema.org/gala.

Last year, more than 600 members of the industry gathered at the SEMA Installation Banquet & Gala Fundraiser to pay tribute to the 2007 Hall of Fame inductees and to honor newly elected and outgoing members of the SEMA Board of Directors. With the Gala Fundraiser added to the annual event for the first time in 2007, the industry raised more than $200,000 for children's charities Childhelp and Victory Junction Gang Camp.

The 2008 SEMA Installation Banquet & Gala Fundraiser is set for Friday, July 25, at the Hyatt Regency Irvine in Irvine, California. Proceeds from the event and its associated fundraising activities will once again be contributed to Childhelp and Victory Junction Gang Camp.

Details on the sponsorship opportunities available for the SEMA Installation Banquet & Gala Fundraiser are available by clicking here. For complete information on the event, click here.

The following are candidates for the 2008 SEMA Board of Directors' election. The ballots are scheduled to be mailed in May. For more information regarding the SEMA Board of Directors election or the voting process, contact Christine Papavero at christinep@sema.org.

Manufacturers Category - Four Open Seats 

• Chris Thomson, National Sales Manager, AIRAID Filter Co. (Incumbent)
• Bill Wagner, Vice President Sales and Marketing, Winfield Consumer Products (Incumbent)
• Ron Funfar, President/COO, Hedman Hedders/Trans-Dapt
• BJ Leanse, North America Sales Manager, Big Country Truck Accessories
• Mark Vogt, General Manager, Classic Industries
• Tim Watts, Vice President Sales & Marketing, Superlift Suspension Systems

Alternate: Larry Norris, Global Vice President, MagnaFlow Performance

Distributor/Retailer Category - Three Open Seats 

• Ralph Accinno, President, Racers Equipment Warehouse (Incumbent)
• Luanne Brown, CEO/President, eTool Developers
• Bob Moore, President, Bob Moore & Partners
• Ed Orzetti, President/CEO, Keystone Automotive Operations
• Dan Smith, President, Capstone Financial Group

Alternate: Gary Light, President, Speed Warehouse