Despite drops in vehicle sales, SEMA market research shows that consumers are still planning on making specialty-equipment purchases. In July, 23% of adult drivers surveyed said they plan on purchasing specialty equipment in the next three months, which is actually a slight increase of 1% from June’s survey. Every month SEMA surveys a random sample of 1,000 U.S. drivers, or “general consumers,” to measure current sentiment toward automotive specialty-equipment purchases. By product, 18% of those planning to buy specialty equipment said they plan to put their dollars toward wheels, tires and suspension components, 10% indicated racing and performance products, and 8% indicated specialty accessories/appearance products.

Automotive enthusiasts, a subset of “general consumers,” were surveyed late last year to provide further insight into specialty-equipment purchases and to show specifically which types of products are purchased most often. Approximately 3,800 enthusiasts were surveyed, and the results revealed the most popular wheels, tires and suspension, racing and performance, and specialty accessories/appearance purchases made by this group. In terms of performance, enthusiasts turn to air intake filter replacements for added horsepower and fuel economy. Tires were the most popular upgrade among wheel, tires and suspension purchases, but custom wheels were a close second. The most popular accessory/appearance product purchases turned out to be window tint, fulfilling consumers’ needs for added privacy, heat reduction and glare in their vehicles.

Consumers may shift in their vehicle preferences but, ultimately, they still plan to accessorize them. Although vehicle sales did drop last month compared to last year, the need to upgrade the appearance and performance of those vehicles purchased is actually moving in the positive direction. With the drops in vehicle sales, however, came a shift in the brands of vehicles consumers have purchased. The table below shows how each of the automakers fared in the month of July compared to the same time last year.

July marked the first time that consumers purchased more imported automobiles than domestic, according to a recent article by The Detroit News. Domestic automaker market share dropped to 48.1% in July, showing that consumer preference for new vehicles has shifted. The article reports that every major automaker experienced a drop in sales as high fuel prices and a slumping housing market have taken a toll on the U.S. economy.

“On an annualized basis, seasonally adjusted sales were running at an anemic 15.5 million vehicles, down from 17.2 million a year ago. Across the United States, the industry sold 147,000 fewer cars and trucks last month than in June and 185,000 fewer than last July,” The Detroit News article notes.

General Motors reported a 22.3% drop in sales while Ford was down 19.1% and the Chrysler Group fell 8.4%. On the import side, sales were down 7.3% at Toyota and 7.1% at Honda. Only Nissan managed to show a sales increase in July—1.7% compared to sales of last year.

So what does this all mean? Although consumers change their vehicle buying preferences—now buying more imports than in the past—they still have the need and desire to modify the appearance and performance of their vehicles.

Source: Terlep, Sharon. (August 1, 2007). “Foreign rivals outsell Big 3 for first time.” The Detroit News. Retrieved August 10, 2007 from www.detnews.com; SEMA Research and Information Center.

After a mid-year low in mid-May to mid-June, online auction sales of turbos and superchargers climbed back up mid-June through mid-August. Enthusiasts spent $1,478,853 on forced induction parts in the period May 20-June 18, a yearly low, but increased that spending to $1,527,658 the following month, and $1,584,978 a month after that.

The bulk of those sales were in turbochargers and parts; superchargers accounted for just 2.4% of sales in the period July 19-August 17, and 2.9% the month prior, according to data from Terapeak, a developer of market-focused research software that monitors online sales and auctions. Nitrous was also only a fraction of overall sales, accounting for just 0.7% in July-August and 0.9% in June-July.

Sales still have a way to go to match those of the first quarter, when enthusiasts spent $5.7 million on forced induction components. Mid-February to mid-March was the banner month, logging just over $2 million in sales. The second quarter cooled by about 11%, but started its climb in mid-June and has been on the rise since.

How prevalent is Internet purchasing among specialty-equipment enthusiasts?

"The past two years, SEMA research has shown that the highest percentage of automotive enthusiasts indicate they purchased their performance parts and accessories over the Internet," says SEMA research analyst Ty Michael.

"Interestingly, roughly the same percentage of enthusiasts indicated that they purchased their parts at traditional brick and mortar shops. Thirty-nine percent of enthusiasts said they purchased on the Internet, compared to 31% who indicated they went to a physical location to make their purchases."

Terapeak's Motors P&A Research provides sellers with access to comprehensive research on the past year of online auction data and allows users to get in-depth research reports on the competition and themselves. More at www.terapeak.com/motors.

SEMA will exhibit at a new trade show in China—the China International Auto Parts Expo (CIAPE)—set for November 29–December 1, in Beijing. The show, which features both automakers and aftermarket products, is expected to draw an estimated 2,000 exhibitors and 50,000 visitors. In the 50,000 square meters of space, the show will host summit forums, seminars and technology workshops. For more information on the show, visit www.iapechina.com/english or contact Linda Spencer at lindas@sema.org.  

The European Union Registration, Evaluation and Authorization of Chemicals legislation (REACH) was put into effect on June 1, 2007. Companies selling into Europe that produce or incorporate chemicals into their products can learn more about the requirements on the European Union’s website http://ec.europa.eu/echa/reach_en.html. A good summary of the various European environmental-related directives is available on the SEMA website at http://www.sema.org/images/pdf/euenvironmentaldirectives.pdf.

Canadian Premier Dalton McGuinty announced last week—two weeks before a provincial election—that beginning September 30, a new Ontario law will charge those caught driving 50km/h (31 mph) over the speed limit can be treated as a street racer. That means, according to a National Post report, that police can issue roadside seven-day license suspensions and impound vehicles for a week. If convicted, offenders face fines ranging from $2,000–$10,000.

For a second conviction within 10 years of the first, courts could take away a driver's license for up to 10 years, reports the Toronto Star. Currently, if someone drives 50 km/h over the limit they will get a ticket of about $500 and may, if convicted, have their license suspended for up to 30 days. On the second conviction the court can suspend the license for up to a year.

Officials said that on average, there are about 2,500 convictions in Ontario per year for driving 50km/h or more above the speed limit.

If you missed last Thursday's webcast, "Boost Your Company Image, Sales and Profitability With Good Product Data," the audio and PDF presentation is now available for download at www.sema.org/webinar. Navigate to the menu on the right-hand side of the page, scroll down to "Recent Webinars" and click for the download.

The automotive industry is quickly moving into the world of technology and the benefits are rightfully so: increased sales, fewer returns and improved product exposure. Learn how to produce good and complete product data when presenter Scott O'Toole of Motor State Distributing explains the 17 vital pieces of product data that will help increase your bottom line.

Also, remember to mark your calendar for Thursday, September 13, 10 a.m. (PST) for our webinar "Correlating Parts Service to Customer Wants and Needs." Customer care is important to running a profitable business. Develop the winning tactics that transform one-time buyers into repeat customers, and repeat customers into loyal advocates of your business from presenter Gary Naples of Freelance Associates Inc.

What are the most significant parts ever produced by the specialty-equipment industry? That’s what Hot Rod magazine aims to find out, and it’s seeking your voice in the selection. The staff explains:

“We've compiled a list of 30 products that we feel have played significant roles in shaping the specialty-equipment industry. We'd like you, as an industry insider and member of SEMA’s readership, to take a few minutes to vote on the top 10 products that you feel are most worthy of the Hall of Fame.

“You also have the option of writing in your own candidates. In addition to determining the winners, your votes and write-ins this year will be used to compile the lists for future Hall of Fame voting.

“The 2007 Hall of Fame will have 10 charter inductees that will be featured in the December issue of Hot Rod and later announced at the New Products Breakfast during the 2007 SEMA Show. There will also be an historic display alongside the New Products area.

“Thanks for taking part in the inaugural voting for what will become an annual event. To lend your influence to the decisions, please vote by selecting your top 10.”

To vote, visit: www.zoomerang.com/recipient/survey-intro.zgi?p=WEB226SQY3YN63

Legislation (AB 616) to require annual smog-check inspections for vehicles 15 years old and older has been approved by the California Assembly and the Senate Transportation Committee. The bill now moves to the Senate Appropriations Committee for consideration on August 20. AB 616 would also require that funds generated through the additional inspection fees be deposited into an account which can be used to scrap older cars.

In 2004, a new California law was enacted to require lifetime testing of all '76-and-newer model-year vehicles. Pre-'76 motor vehicles would remain exempt under AB 616.

For additional information, see www.semasan.com/main/main.aspx?id=62246.

For details, contact Steve McDonald at stevem@sema.org. 

The following information is for exhibitors of the 2007 SEMA Show, October 30–November 2, in Las Vegas.

Register for the New Products Showcase
With the 2007 SEMA Show 75 days away, exhibitors are encouraged to register their products for the New Products Showcase online at www.SEMAshow.com/newproducts.

The 2007 SEMA Show draws in thousands of buyers from throughout the world each year that are eager to see the latest that the specialty-equipment industry has to offer. The New Product Showcase at the Show is a centralized location where buyers and media can view the product and learn of its specs and descriptive information. For additional product publicity, every product in the showcase will be photographed and appear in the SEMA News magazine and on the SEMA website: www.SEMAphotos.com.

More information about the New Product Showcase is located under Tab #7 of the 2007 SEMA Show Exhibitor Services Manual.

Submit Feature Vehicle Applications Online
The 2007 SEMA Show is the temporary home for some of the most dynamic and envy-inducing vehicles in the world. To get your feature vehicle registered, use the online application form located at www.SEMAshow.com/featurevehicles. All feature vehicles entered for the Show are photographed and included on www.semaphotos.com.  

More information about the feature vehicle process is located under Tab #12 of the 2007 SEMA Show Exhibitor Services Manual.

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